District Not Recorded

A Springdale, Arkansas, man was sentenced today in the U.S. District Court in Fayetteville, Arkansas, for multiple tax crimes, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Conner Eldridge of the Western District of Arkansas.

Doyle Smith, 56, was sentenced to serve 48 months in prison to be followed by five years of supervised release and ordered to pay a $5000 fine.  On Feb. 11, following a three-day trial before U.S. District Judge Timothy L. Brooks of the Western District of Arkansas, a jury found Smith guilty of four counts of filing a false tax return, one count of corruptly endeavoring to obstruct and impede the administration of the internal revenue laws and one count of presenting a fictitious financial obligation.

According to evidence introduced at trial, in 2008 and 2009, Smith submitted four false individual federal tax returns for tax years 2005 through 2008, which falsely reported a total of more than $1.4 million in fictitious federal tax withholdings.  Based on these fictitious withholding amounts, Smith claimed a total of $1,021,457 in income tax refunds that he was not entitled to receive.  Smith also submitted false claims and correspondence to both the Internal Revenue Service (IRS) and third-parties in an attempt to cause the IRS and U.S. Treasury to pay his debts to third parties and to obstruct the IRS’ tax administration efforts.  For example, in January 2010, Smith mailed to the Department of Arkansas Finance and Administration a fictitious financial instrument titled “U.S. Treasury Trust Account Money Order.”  This fictitious document purportedly obligated U.S. Treasury funds in the amount of $129,439 to pay for outstanding sales taxes that Smith owed to the state of Arkansas.

“Individuals like Doyle Smith, who commit criminal tax offenses and attempt to use the U.S. Treasury as their personal slush fund, will be identified, investigated, prosecuted and incarcerated,” said Acting Assistant Attorney General Ciraolo.  “The message from today’s sentencing is clear: those who attempt to cheat the system will pay a heavy price for their criminal conduct.”

“Smith, in his fraudulent scheme, attempted to steal taxpayer money from the U.S. Treasury for his own benefit,” said U.S. Attorney Eldridge.  “Those who steal from the U.S. Treasury steal directly out of the pockets of the hard-working people of the Western District of Arkansas.  With today’s sentence, a strong message has been sent that our office and our law enforcement partners will relentlessly pursue fraud wherever we find it.”

“Today’s sentencing is a reminder of the penalties individuals face when submitting false claims for federal income tax refunds,” stated Special Agent in Charge Christopher A. Henry of the IRS-Criminal Investigation (CI).  “IRS-Criminal Investigation will continue their aggressive pursuit of those who use fraudulent methods in an attempt to corrupt our nation’s tax system, and our unwavering commitment to protecting the interests of law-abiding taxpayers.”

“It is the Treasury Inspector General for Tax Administration’s mission to protect the integrity of the Internal Revenue Service and promote the fair administration of our federal tax system,” said Special Agent in Charge Ruben Florez of the Treasury Inspector General for Tax Administration’s (TIGTA’s) Mid-States Field Division.  “TIGTA and its law-enforcement partners will vigorously investigate individuals that attempt to corruptly interfere with the administration of the internal revenue laws through fraudulent means, and will do everything within its power to ensure that those involved will be prosecuted to the fullest extent of the law.  Today’s sentencing demonstrates that our justice system will not tolerate these types of actions.”

Acting Assistant Attorney General Ciraolo and U.S. Attorney Eldridge commended the special agents of IRS-CI and TIGTA, who investigated the case, as well as Trial Attorneys Robert Kemins and David Zisserson of the Tax Division, who prosecuted the case.

Attorneys General of the United States and Mexico Agree to Boost Bilateral Collaboration

In their first meeting since assuming their current positions, Attorney General Loretta E. Lynch of the United States and Attorney General Arely Gómez González of Mexico reviewed the current law enforcement agenda between the two countries and pledged to work together to fight transnational crime, including drug trafficking organizations, fraud and financial crime, and human trafficking and smuggling.

During the meeting, which was held in the offices of the U.S. Department of Justice in Washington, D.C., both officials agreed to begin a new push for collaboration between the two nations in the context of reciprocity and respect.

“I am pleased to have had the opportunity to host this historic meeting, and to reaffirm our partnership with the Office of the Attorney General of Mexico,” said Attorney General Lynch.  “Attorney General Gómez González and I are committed to working closely to fight transnational crime, whatever form it takes – whether trafficking in drugs, or trafficking in persons; whether violent gangs, or financial fraudsters.  Together, we will build on the strong record of cooperation between our two countries to advance the common mission that our nations share.”

The Attorneys General discussed the process of institutional transformation that Mexico's justice system is undergoing, with the entry into force of the New System for Criminal Justice, as well as other reforms designed to move towards a modern Attorney General’s Office. 

“We are changing the institution,” said Attorney General Gómez González.  “We want modern, transparent law enforcement that guarantees full respect for human rights and is based on technical, scientific investigations which produce results.  That is how we will strengthen public confidence.”

Attorney General Lynch was joined by Deputy Attorney General Sally Yates, Assistant Attorney General Leslie Caldwell of the Criminal Division and Bruce Swartz, Deputy Assistant Attorney General of the Criminal Division and Counselor for International Affairs.

Those from Mexico’s Attorney General's Office who participated in the meeting included Deputy Attorney General José Alberto Rodríguez Calderón of Legal and International Affairs, Deputy Attorney General Felipe de Jesús Muñoz Vázquez, Specializing in Organized Crime, Deputy Attorney General Eber Omar Betanzos Torres of Human Rights, Crime Prevention and Community Services, and Chief Director Tomás Zerón de Lucio of the Criminal Investigation Agency. 

The Justice Department announced today that it won a lawsuit against Estopy Farms regarding allegations that the company discriminated against a U.S. citizen by preferring to hire foreign workers.  The case was decided by the Office of the Chief Administrative Hearing Officer, the administrative court authorized to hear discrimination cases under the Immigration and Nationality Act (INA). 

The court found that Estopy Farms, a farm that harvests crops in Texas, violated the INA when it refused to hire a qualified U.S. worker to operate agricultural equipment because the company preferred to hire foreign workers under the H-2 visa program.  The case now moves to the remedial phase for the court to determine what Estopy Farms must do to remedy the violation, which includes the possibility of paying civil penalties. 

“Companies cannot manipulate visa programs to discriminate against U.S. workers because of their citizenship,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division.  “This ruling sends a strong message to all employers that discrimination against U.S. workers will not be tolerated.”         

The case was litigated by the Justice Department’s Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC), which is responsible for enforcing the anti-discrimination provision of the INA.  The statute prohibits employers from discriminating because of citizenship or national origin in hiring, firing, or recruitment or referral for a fee.  The statute also prohibits employers from placing additional documentary burdens on work-authorized applicants or employees during the employment eligibility verification process because of their citizenship status or national origin.

For more information about protections against employment discrimination under immigration laws, call OSC’s worker hotline at 1-800-255-7688 (1-800-237-2515, TTY for hearing impaired); call OSC’s employer hotline at 1-800-255-8155 (1-800-237-2515, TTY for hearing impaired); sign up for a free webinar at www.justice.gov/crt/about/osc/webinars.php; email osccrt@usdoj.gov; or visit OSC’s website at www.justice.gov/crt/about/osc.  

Applicants or employees who believe they were subjected to discrimination based on their citizenship, immigration status or national origin in hiring, firing, or recruitment or referral for a fee, or different documentary requirements based on their citizenship, immigration status or national origin, should contact OSC’s worker hotline for assistance.

Former Company Vice President Pleads Guilty to Participating in Bribery Scheme

A Florida defense and government contracting company, IAP Worldwide Services Inc. (IAP), entered into a non-prosecution agreement and agreed to pay a $7.1 million penalty to resolve the government’s investigation into whether the company  conspired to bribe Kuwaiti officials in order to secure a government contract.  A former vice president of IAP also pleaded guilty today to conspiracy to violate the Foreign Corrupt Practices Act (FCPA) for his involvement in the bribery scheme. 

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Dana J. Boente of the Eastern District of Virginia, Assistant Director in Charge Andrew G. McCabe of the FBI’s Washington, D.C., Field Office and Special Agent in Charge Robert E. Craig Jr. of the Defense Criminal Investigative Service (DCIS) Mid-Atlantic Field Office made the announcement.

James Michael Rama, 69, of Lynchburg, Virginia, pleaded guilty before U.S. District Court Judge James C. Cacheris of the Eastern District of Virginia to one count of conspiracy to violate the anti-bribery provisions of the FCPA.  Sentencing is scheduled for Sept. 11, 2015.

In 2004, Kuwait’s Ministry of the Interior (MOI) initiated the Kuwait Security Program (KSP), a project that was intended to provide nationwide surveillance capabilities for several Kuwaiti government agencies primarily through the use of closed-circuit television.  The project was divided into two phases: a planning and feasibility period called “Phase I” and an installation period called “Phase II.”  The MOI was responsible for overseeing the KSP, including selecting contractors to facilitate its implementation.  Revenues from the Phase II contract were expected to be substantially greater than from Phase I.

According to admissions made in connection with both the non-prosecution agreement and Rama’s plea agreement, IAP and Rama schemed to ensure that IAP worked as the consultant for Phase I so that it could tailor the requirements for the Phase II contracts to IAP’s strengths, which would give the company an advantage in the Phase II bidding.  To that end, both IAP and Rama admitted that in February 2006, executives and senior employees of IAP, including Rama, set up a shell company called “Ramaco” to bid on Phase I, in part to conceal IAP’s role in crafting the Phase II requirements and its conflict of interest in connection with securing the Phase II contract.

Ultimately, Ramaco secured the Phase I contract for approximately $4 million.  According to admissions made in connection with both agreements, the Rama and IAP agreed that half of that amount would be diverted to a consultant who would pay bribes to Kuwaiti government officials to assist IAP in obtaining and retaining the Phase I contract and to obtain the Phase II contract.  IAP and Rama admitted that they disguised the payments by transferring funds Ramaco received to an IAP bank account and then to the consultant through a series of accounts and intermediaries.  According to the factual statements incorporated into both the non-prosecution agreement and Rama’s plea agreement, between September 2006 and March 2008, IAP and its co-conspirators paid the consultant approximately $1,783,688 understanding that some or all of the funds would be used to bribe Kuwaiti government officials.

Based on a variety of factors, including but not limited to IAP’s cooperation, the Criminal Division entered into a non-prosecution agreement with the company.  The non-prosecution agreement requires IAP’s continued cooperation.  In addition, the non-prosecution agreement requires IAP to conduct a review of its existing internal controls, policies and procedures, and make any necessary modifications to ensure that the company maintains accurate record keeping and a rigorous anti-corruption compliance program.  The non-prosecution agreement further requires IAP to report periodically to the Criminal Division and to the U.S. Attorney’s Office of the Eastern District of Virginia regarding remediation and implementation of the aforementioned compliance program and internal controls, policies and procedures.

The investigation is being conducted by the FBI’s Washington, D.C., Field Office and the DCIS Mid-Atlantic Field Office.  The case is being prosecuted by Assistant Chief Tarek Helou and Trial Attorney James P. McDonald of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Paul J. Nathanson of the Eastern District of Virginia.  The United Kingdom’s Serious Fraud Office and the Criminal Division’s Office of International Affairs also provided assistance during the investigation.

Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.

IAP NPA

Rama Plea Agreement

Hebrew Homes Health Network Inc., its operating subsidiaries and affiliates, and William Zubkoff, the former president and executive director of Hebrew Homes Health Network Inc. (collectively Hebrew Homes), have agreed to pay $17 million to resolve allegations that Hebrew Homes violated the False Claims Act by improperly paying doctors for referrals of Medicare patients requiring skilled nursing care, the Department of Justice announced today.  Hebrew Homes provided skilled nursing services at seven rehabilitation and skilled nursing facilities in Miami-Dade County, Florida.  This is the largest settlement involving alleged violations of the Anti-Kickback Statute by skilled nursing facilities in the United States.

“Illegal inducements paid to physicians in exchange for patient referrals will not be tolerated,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division.  “Medicare funds should be used to provide care for our senior citizens, not as an inducement to physicians to refer business.”

From 2006 through 2013, Hebrew Homes allegedly operated a sophisticated kickback scheme in which they hired numerous physicians ostensibly as medical directors pursuant to contracts that specified numerous job duties and hourly requirements.  The various facilities had several such medical directors under contract at any given time, paying each several thousand dollars monthly.  The United States alleged that in reality these were ghost positions, and that most of the medical directors were required to perform few, if any, of their contracted job duties.  Instead, they were allegedly paid for their patient referrals to the Hebrew Homes facilities, which increased exponentially once the medical directors were put on the payroll.

“The record settlement announced today demonstrates this office’s commitment to rooting out all forms of illegal kickback schemes,” said U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida.  “And that is certainly true in the context of nursing homes, where the Department of Justice will not allow healthcare decisions for elderly Medicare patients to be influenced by kickback payments to physicians.  The integrity of our public health care program requires that such decisions be based on quality of care.”

“Hebrew Homes’ intricate kickback scheme in this record-setting case threatened the impartiality of physician referrals, the financial integrity of Medicare and the public’s trust in the health care system,” said Special Agent in Charge Shimon R. Richmond of the U.S. Department of Health and Human Services’ Office of Inspector General (HHS-OIG).  “Our agency will continue to investigate nursing homes and other health care providers that seek to illegally boost profits at the expense of federal health care programs.”

The Anti-Kickback Statute is intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives.  The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by federal health care programs, including Medicare. 

“Illegal kickbacks undermine the integrity of the Medicare system by putting profits in front of patient welfare,” said Special Agent in Charge George L. Piro of the FBI’s Miami Field Office.  “The investigators who helped unravel this intricate scam are to be commended for their diligence and commitment to root out fraud within our health care system.”

As part of the settlement, Mr. Zubkoff has agreed to resign as Hebrew Homes’ Executive Director and to no longer be an employee of the company.  Also, as part of the settlement announced today, Hebrew Homes has entered into a five-year corporate integrity agreement with HHS-OIG, and has agreed to change its policies on hiring and maintaining medical directors.

The settlement announced today resolves allegations made in a lawsuit filed by Stephen Beaujon, a former CFO of Hebrew Homes, under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery.  Mr. Beaujon will receive $4.25 million. 

This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $24.3 billion through False Claims Act cases, with more than $15.3 billion of that amount recovered in cases involving fraud against federal health care programs.

The settlement was the result of a coordinated effort by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office of the Southern District of Florida, the FBI and HHS-OIG.     

The case is captioned United States ex rel. Beaujon v. Hebrew Homes Health Network, Inc., et al., Case No. 12-20951 CIV (S.D. Fla.).  The claims resolved by the settlement are allegations only and there has been no determination of liability.

Se reúnen por primera ocasión, Arely Gómez González y Loretta E. Lynch.

En su primera reunión de trabajo desde que asumieron su encargo, la Procuradora General de la República, Arely Gómez González y la Procuradora General de los Estados Unidos de América, Loretta E. Lynch, hicieron una revisión y balance del estado que guardan los temas de la agenda en materia de procuración justicia entre ambos países y se comprometieron a trabajar juntas para luchar contra el crimen organizado transnacional, incluyendo a las organizaciones de narcotráfico, fraude y delitos financieros, así como tráfico de personas y de bienes.

Durante el encuentro, que se llevó a cabo en las oficinas del Departamento de Justicia, en Washington, D. C., ambas funcionarias acordaron dar un nuevo impulso a la colaboración entre ambas naciones, en un contexto de reciprocidad y respeto.

La Titular de la PGR, abordó con su contraparte estadounidense el proceso de transformación de la institución, a partir de la entrada en vigor del Nuevo Sistema de Justicia Penal, así como de las reformas para transitar hacia una Fiscalía General.

“Estamos cambiando a la institución, queremos una procuración de justicia moderna, transparente, de pleno respeto a los derechos humanos, basada en investigaciones científicas y técnicas, que ofrezcan resultados. De esta forma, se fortalecerá la confianza ciudadana”, afirmó la Procuradora Gómez González.

Por su parte, la Procuradora General de los Estados Unidos de América, Loretta E. Lynch, indicó:

“Me complace haber tenido la oportunidad de auspiciar este encuentro histórico y de reafirmar nuestra sociedad con la Procuraduría General de la República de México,” dijo la Procuradora Lynch. “La Procuradora Gómez González y yo estamos comprometidas a trabajar muy de cerca para luchar contra el crimen transnacional, en cualquiera de sus formas, ya sea el narcotráfico o el tráfico de personas; contra grupos violentos o defraudadores financieros. Juntas, construiremos sobre la base sólida de cooperación entre nuestros dos países para avanzar en la misión común que nuestras naciones comparten”.

Por la Procuraduría General de la República participaron en la reunión, José Alberto Rodríguez Calderón, Subprocurador Jurídico y de Asuntos Internacionales; Felipe de Jesús Muñoz Vázquez, Subprocurador Especializado en Investigación de Delincuencia Organizada; Eber Omar Betanzos Torres, Subprocurador de Derechos Humanos, Prevención del Delito y Servicios a la Comunidad y Tomás Zerón de Lucio, Director en Jefe de la Agencia de Investigación Criminal.

Por el Departamento de Justicia, acompañaron a la Procuradora Loretta Lynch, Sally Yates, Subprocuradora General; Leslie Caldwell, Subprocuradora de la División Criminal y Bruce Swartz, Subprocurador Adjunto de la División Criminal y Consejero para Asuntos Internacionales.

Defendant Attempted to Pass Navy Supercarrier Schematics to Egypt

Mostafa Ahmed Awwad, 36, of Yorktown, Virginia, pleaded guilty today to charges of attempted espionage relating to his attempt to provide schematics of the nuclear aircraft carrier USS Gerald R. Ford to Egypt while serving as a Navy engineer.  Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Dana J. Boente of the Eastern District of Virginia, Assistant Director Randall C. Coleman of the FBI’s Counterintelligence Division and Special Agent in Charge Susan Triesch of the Naval Criminal Investigative Service (NCIS) Norfolk, Virginia, Field Office made the announcement.

“Awwad pleaded guilty to leveraging his position of trust within the Navy to share the schematics of the USS Gerald R. Ford nuclear aircraft carrier with what he believed to be a foreign government,” said Assistant Attorney General Carlin.  “The National Security Division will continue to pursue and bring to justice those who abuse their access to sensitive defense information.  I would like to thank all of the special agents, prosecutors and other personnel whose work led to the guilty plea in this case.”

“Today, Mr. Awwad is being held responsible for attempting to steal the valuable plans for the USS Ford and to provide them to a foreign government,” said U.S. Attorney Boente.  “This office is committed to safeguarding our nation’s sensitive defense information, and we will bring to justice those who seek to steal it.  I want to commend our partners at the FBI Norfolk and NCIS Norfolk for their excellent work on this case.”

“This case underscores the persistent national security threat posed by insiders stealing critical national defense information in order to benefit foreign governments,” said Assistant Director Coleman.  “Fortunately, the aggressive counterintelligence posture of the FBI and our interagency partners enabled the identification and neutralization of Awwad’s efforts before he transferred any information to a foreign power.  Working together, we prevented the loss of billions of dollars in research costs and the exposure of potential vulnerabilities to our newest generation of nuclear aircraft carrier.”

“This case demonstrates that NCIS aggressively pursues anyone who would endanger our national security by targeting critical platforms like the Ford class carrier,” said Special Agent in Charge Triesch.  “The close collaboration between NCIS and the FBI thwarted this insider threat and we will continue cooperative efforts to safeguard those who protect and serve in the Department of the Navy.”

According to court documents, Awwad began working for the Department of the Navy in February 2014 as a civilian general engineer in the Nuclear Engineering and Planning Department at the Norfolk Naval Shipyard.  Based on a joint investigation, an undercover FBI agent contacted Awwad by telephone on Sept. 18, 2014, and asked to meet him the following day.  Without seeking additional information from the caller, Awwad agreed.  The next day, Awwad met with the undercover FBI agent, who was posing as an Egyptian intelligence officer, in a park in Hampton, Virginia.  During the meeting, Awwad claimed it was his intention to utilize his position with the U.S. Navy to obtain military technology for use by the Egyptian government, including but not limited to the designs of the USS Gerald R. Ford nuclear aircraft carrier, a new Navy “supercarrier.”  Awwad agreed to conduct clandestine communications with the undercover FBI agent, and to conduct “dead drops” in a concealed location in the park.

On Oct. 9, 2014, Awwad and the undercover FBI agent met at a hotel where Awwad described a detailed plan to circumvent U.S. Navy computer security by installing software on his restricted computer system that would enable him to copy documents without causing a security alert.  At this time, Awwad also provided the undercover FBI agent with four Computer Aided Drawings of a U.S. nuclear aircraft carrier downloaded from the Navy Nuclear Propulsion Information system.  During the discussion, Awwad indicated his understanding that the drawings would be sent to and used in Egypt.  Awwad also asked the undercover FBI agent for $1,500 to purchase a pinhole camera that he would wear around the shipyard to photograph restricted material.  At the conclusion of the meeting, Awwad agreed to provide the undercover FBI agent with passport photos which would be used to produce a fraudulent Egyptian passport so that Awwad could travel to Egypt without alerting U.S. government officials.

On Oct. 23, 2014, Awwad traveled to the pre-arranged dead drop site situated on a secluded hiking trail and utilized a concealed container disguised in a hole in the ground.  He retrieved $3,000 before placing an external hard drive and two passport photos inside.

On Dec. 5, 2014, Awwad and the undercover agent met in the Hampton Roads, Virginia, area.  During this meeting, Awwad stated that he planned to travel to Egypt.  Awwad subsequently said he wanted to meet with “high ranking” Egyptian intelligence and military officials in Cairo.  Awwad also stated during the meeting that he had copied all of the schematics.  During the meeting, Awwad provided the undercover FBI agent a thumb drive that contained more schematics of the USS Gerald R. Ford.  The undercover FBI agent handed Awwad the “escape plan” – in actuality a manila envelope with no real plan inside – along with $1,000 in currency, shortly before Awwad was arrested.

The schematics of the USS Gerald R. Ford that Awwad provided are information related to the national defense of the United States.  The USS Gerald R. Ford, which is currently under construction, is the first in a new class of aircraft carriers.  When completed, the USS Ford will be the most advanced aircraft carrier in the world, with approximately 4,000 sailors on board.  The schematics contain Naval Nuclear Propulsion Information and they are marked with the handling restriction “NOFORN,” which means they are not releasable to foreign persons.

Awwad pleaded guilty to a criminal information charging him with attempted espionage, and his plea was accepted by U.S. District Court Judge Raymond A. Jackson of the Eastern District of Virginia.  He will be sentenced on Sept. 21, 2015.  The maximum penalty for this offense is life in prison, but the plea agreement recommends that Awwad receive a sentence in the range of eight to 11 years.  The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.

This case was investigated by the FBI’s Norfolk Field Office and NCIS, in cooperation with the Department of the Navy.  The case is being prosecuted by Assistant U.S. Attorneys Benjamin L. Hatch and Joseph E. DePadilla of the Eastern District of Virginia, and Senior Trial Attorney Heather M. Schmidt of the Justice Department’s National Security Division. 

A leader of the Imperial Gangsters street gang was sentenced today to life in prison for five counts of murder in aid of racketeering and other RICO-related charges, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney David A. Capp of the Northern District of Indiana.

Juan Briseno, aka Tito, 25, of Hammond, Indiana, was sentenced by Chief Judge Philip P. Simon of the Northern District of Indiana to a total of six life sentences plus 10 years in prison.  The sentences will run consecutively.

On March 6, 2015, a federal jury in the Northern District of Indiana convicted Briseno of engaging in a RICO conspiracy, engaging in a drug distribution conspiracy, five counts of murder in aid of racketeering, one count of attempted murder in aid of racketeering, and a firearms count related to the attempted murder.

According to the evidence presented at trial, Briseno was a leader of the 149th Street Imperial Gangsters, a violent clique of the Imperial Gangsters based in East Chicago, Indiana.  In his leadership role, Briseno supervised prospective gang members known as “shorties.”

The evidence showed that the Imperial Gangsters had a long-standing rule that gang members were to shoot rival gang members on sight, and that they had a policy to shoot anyone selling drugs in their neighborhood when such persons had not either purchased the drugs from the Imperial Gangsters or paid “taxes” to the gang for the right to sell drugs in their territory.  The five murders of which Briseno was convicted were committed consistent with these directives.

According to witness testimony, Briseno expressed no remorse for his participation in various murders.  Indeed, he bragged about killings and encouraged others to do the same. 

With regard to the specific murders, the evidence at trial demonstrated that, on Sept. 26, 2007, Briseno knocked on Luis Ortiz’s apartment door in Hammond, Indiana, and shot him dead in the doorway.  According to the evidence presented at trial, Briseno targeted Ortiz because he was a member of the rival Latin King Street Gang.

Additionally, the evidence showed that, on June 3, 2008, Briseno killed both Miguel Mejias, a former member of the Latin Kings, and Michael Sessum, an associate of Mejias, while they were unarmed and bringing takeout food to their pregnant girlfriends.  According to the evidence presented at trial, Briseno fired multiple shots into Mejias’ residence, striking a female victim in the arm while she was holding her infant child.  Another pregnant female victim and multiple minor victims also were inside the apartment at the time.  According to testimony presented at trial, in the weeks prior to the confrontation, Mejias implored a common friend to tell Briseno that Mejias was no longer “gangbanging” and did not want any trouble.  In response to this message, Briseno said, “[expletive] him, he was going to bring [Latin] Kings into our neighborhood.”

The evidence at trial also demonstrated that, on Feb. 7, 2010, Briseno and his associates murdered rival Two-Six gang member Miguel Colonas he was leaving a party in the Harbor Area of East Chicago.  In this incident, Briseno and several associates laid in wait for Colon to leave the party, and then shot the unsuspecting Colon from a vehicle.

Finally, the evidence at trial demonstrated that, on June 19, 2010, Briseno murdered Latroy Howard because he was selling drugs in Imperial Gangster territory.  A video introduced at trial showed Briseno’s vehicle circling the block several times prior to the murder, and then showed Briseno confronting Howard on foot and shooting him twice in the head at point-blank range.

This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives; the FBI; and the East Chicago Police Department.  The Gary, Indiana, Police Department; the Hammond Police Department; and the Lake County High Intensity Drug Trafficking Area Program provided assistance.  This case is being prosecuted by Assistant U.S. Attorney David J. Nozick of the Northern District of Indiana and Trial Attorney Bruce R. Hegyi of the Criminal Division’s Capital Case Section.

A Russell Springs, Kentucky, man has been found guilty by a jury sitting in the U.S. District Court in Bowling Green, Kentucky, of multiple tax crimes, including failure to report hundreds of thousands of dollars on his income taxes, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Kerry B. Harvey of the Eastern District of Kentucky.

On June 12, the jury found James S. Faller II, 54, guilty of one count of corruptly endeavoring to obstruct the Internal Revenue Code, four counts of evading federal individual income taxes, one count of falsifying a document submitted to the Internal Revenue Service (IRS) under the penalty of perjury and four counts of failing to file timely his 2006 through 2009 federal individual income tax returns.  The jury returned the verdict after two hours of deliberation following a nine-day trial.

According to evidence introduced at trial, from at least April of 2006 through March of 2010, Faller provided consultation services involving criminal defense investigations and related services, for which he earned gross income of approximately $126,000 to $289,000 per year.  During that time, Faller concealed his income from the federal government by arranging for his income to be made payable to another individual as a nominee and deposited the income into bank accounts that were not in his name.  In March 2010, during an IRS civil collections action, Faller provided a false document to an IRS revenue officer wherein he lied about his true gross monthly income.  Faller also did not file any individual federal income tax returns for those years on a timely basis.  In March 2011, he filed false tax returns for 2006 and 2007. 

Faller is scheduled to be sentenced on Sept. 17 in Bowling Green by Chief U.S. District Judge Joseph McKinley of the Western District of Kentucky.  Faller faces a statutory maximum sentence of five years in prison and a $250,000 fine on the evasion charges, a statutory maximum sentence of three years in prison and a $250,000 fine on the corrupt endeavor to impede charge, a statutory maximum sentence of three years in prison and a $250,000 fine on the false document charge, and a statutory maximum sentence of one year in prison and a $100,000 fine for each count of failure to file income tax returns.

Acting Assistant Attorney General Ciraolo and U.S. Attorney Harvey commended the special agents of the IRS-Criminal Investigation, who investigated the case, and Trial Attorney Thomas Voracek of the Tax Division and Assistant U.S. Attorney Lee Gentry of the Eastern District of Kentucky, who prosecuted the case.

The former co-chief executive officer (CEO) of PetroTiger Ltd. – a British Virgin Islands oil and gas company with operations in Colombia and formerly with an office in New Jersey – pleaded guilty today to conspiring to pay bribes to a foreign government official in violation of the Foreign Corrupt Practices Act (FCPA).

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Paul J. Fishman of the District of New Jersey, and Special Agent in Charge Richard M. Frankel of the FBI’s Newark Division made the announcement.

Joseph Sigelman, 44, of Miami and the Philippines, pleaded guilty today in the District of New Jersey to conspiracy to violate the FCPA.  His trial had commenced on June 1, 2015.  Sigelman will be sentenced June 16, 2015.   

At his plea hearing, Sigelman admitted to conspiring with co-CEO Knut Hammarskjold, PetroTiger’s former general counsel Gregory Weisman, and others to make illegal payments of $333,500 to David Duran, an employee of the Colombian national oil company, Ecopetrol.  Sigelman admitted to making the payments in exchange for Duran’s assistance in securing a $45 million oil services contract for PetroTiger. 

Sigelman is the third former PetroTiger executive to plead guilty in the case.  On Nov. 8, 2013, Weisman pleaded guilty to conspiracy to violate the FCPA and to commit wire fraud.  On Feb. 18, 2014, Hammarskjold pleaded guilty to conspiracy to violate the FCPA and to commit wire fraud.

The case was brought to the attention of the department through a voluntary disclosure by PetroTiger, which fully cooperated with the department’s investigation.  Based on PetroTiger’s voluntary disclosure, cooperation, and remediation, among other factors, the department declined to prosecute PetroTiger.

The department has worked closely with, and has received significant assistance from, its law enforcement counterparts in the Republic of Colombia, which announced in March of this year the arrests of Duran, his wife, a former employee of PetroTiger, and several other officials from Ecopetrol.  Those charges are pending, and a defendant is presumed innocent unless and until proven guilty.  

The department also received significant assistance from Ecopetrol, the National Hydrocarbons Agency, the Office of the Secretary of Transparency of the Republic of Colombia, the Office of the Attorney General of the Republic of Colombia and other agencies within the Colombian government.  The department also appreciates the assistance of the Republic of the Philippines, including the Bureau of Immigration and the Republic of Panama.  The department would also like to thank the United Kingdom’s Metropolitan Police International Assistance Unit for their assistance.

The case is being investigated by the FBI’s Newark Division.  The case is being prosecuted by Deputy Chief Patrick Stokes and Assistant Chief Tarek Helou, with support from Assistant Chief Daniel Kahn, of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Zach Intrater and Glenn Moramarco of the District of New Jersey.  The Criminal Division’s Office of International Affairs also provided significant assistance.

Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.

Sigelman Plea Agreement

Children’s Hospital, Children’s National Medical Center Inc. and its affiliated entities (collectively CNMC) have agreed to pay $12.9 million to resolve allegations that they violated the False Claims Act by submitting false cost reports and other applications to the components and contractors of the Department of Health and Human Services (HHS), as well as to Virginia and District of Columbia Medicaid programs, the Department of Justice announced today.  CNMC is based in Washington, D.C., and provides pediatric care throughout the metropolitan region. 

“The false reporting alleged in today’s settlement deprived the Medicare Trust Fund of millions of taxpayers’ dollars,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division.  “Such conduct wastes critical federal health care program funds and drives up the costs of health care for all of us.”

“The integrity of federal health care programs depends on honest and accurate reporting from the hospitals and other health care providers that receive hundreds of billions of tax dollars every year,” said Acting U.S. Attorney Vincent H. Cohen Jr. of the District of Columbia.  “This settlement demonstrates our commitment to defending the integrity of the system and ensuring that taxpayer money goes to meet the most critical health care needs.  We will continue to work with whistleblowers like the former employee who came forward in this case to battle waste, fraud and abuse that fuel the skyrocketing cost of health care.”

According to the settlement agreement, CNMC misstated information on cost reports and applications in two distinct manners to HHS.  This false information was used by HHS and Medicaid programs to calculate reimbursement rates to CNMC.  The United States contended that CNMC misreported its available bed count on its application to HHS’ Health Resources and Services Administration under the Children’s Hospitals Graduate Medical Education (CHGME) Payment Program.  The CHGME Payment Program provides federal funds to freestanding children’s hospitals to help them maintain their graduate medical education programs that train pediatric and other residents.  The United States further contended that CNMC filed cost reports misstating their overhead costs, resulting in overpayment from Medicare and the Virginia and District of Columbia Medicaid programs.

The settlement resolves allegations brought in a lawsuit filed under the qui tam or whistleblower provisions of the False Claims Act by James A. Roark Sr., a former employee of CNMC.  Under the act, a private citizen can sue on behalf of the United States and share in any recovery.  The United States is entitled to intervene in the lawsuit, as it did here.  As part of the resolution, Mr. Roark will receive $1,890,649.98.

This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $24.3 billion through False Claims Act cases, with more than $15.3 billion of that amount recovered in cases involving fraud against federal health care programs.

This matter was handled by the U.S. Attorney’s Office of the District of Columbia with assistance from the Civil Division’s Commercial Litigation Branch and the HHS’ Office of Inspector General.

The case is United States ex rel. Roark v. Children’s Hosp., et al., No. 1:14-cv-00616 (D.D.C.). 

The claims resolved by the settlement are allegations only, and there has been no determination of liability.

A federal grand jury in Lafayette, Louisiana, has returned a three-count indictment charging Det Stavangerske Dampskibsselskab AS (DSD Shipping) and four employees with violating the Act to Prevent Pollution from Ships (APPS) and obstruction of justice in connection with the illegal discharge of contaminated waste-water directly into the sea, announced Assistant Attorney General John C. Cruden for the Department of Justice’s Environment and Natural Resources Division and U.S. Attorney Stephanie A. Finley for the Western District of Louisiana.  DSD Shipping is a Norwegian-based shipping company that operates the oil tanker M/T Stavanger Blossom, a vessel engaged in the international transportation of crude oil.  Also indicted were four engineering officers employed by DSD Shipping to work aboard the vessel: Daniel Paul Dancu, 51, of Romania; Bo Gao, 49, of China; Xiaobing Chen, 34, of China; and Xin Zhong, 28, of China.

The operation of marine vessels, like the M/T Stavanger Blossom, generates large quantities of waste oil and oil-contaminated waste water.  International and U.S. law requires that these vessels use pollution prevention equipment to preclude the discharge of these materials.  Should any overboard discharges occur, they must be documented in an oil record book, a log that is regularly inspected by the U.S. Coast Guard.

“Companies operating vessels in navigable waterways have a responsibility to prevent oil spills and protect the public and the environment,” said U.S. Attorney Finley.  “One of our priorities is to help preserve the natural resources of this state.  Violators should be clear - charges will be filed against entities and persons who harm these resources and obstruct investigations.”

According to the indictment, in 2014, DSD Shipping and its employees discharged oil-contaminated waste water generated aboard the M/T Stavanger Blossom directly into the sea.  To hide the illegal discharges, DSD Shipping and its employees maintained a fictitious oil record book that failed to record the disposal, transfer, or overboard discharge of oil from the vessel.  The indictment further alleges that prior to an inspection by the U.S. Coast Guard, Chen ordered crewmembers to remove piping connected to the vessel’s overboard discharge valve, install new piping, and repaint the piping to hinder an inspection by the U.S. Coast Guard. 

DSD Shipping and the engineering officers were charged with violating the APPS for failing to record overboard discharges in the vessel’s oil record book and with obstruction of justice for presenting false documents and deceiving the Coast Guard during an inspection in the Port of Lake Charles.  If convicted, DSD Shipping could be fined up to $500,000 per count, in addition to other possible penalties.  Dancu, Gao, Chen and Zhong face a maximum penalty of 20 years in prison for the obstruction of justice charges.  An indictment is merely a formal charge that a defendant has committed a violation of criminal laws and every defendant is presumed innocent until and unless proven guilty.

This is the second indictment arising from a joint, multi-district investigation by the U.S. Coast Guard, Sector Mobile, U.S. Coast Guard Investigative Services and the Criminal Investigation Division for the Environmental Protection Agency.  DSD Shipping, Dancu, Gao, Chen and Zhong were previously indicted in the Southern District of Alabama with a seven-count indictment charging related conduct.  Assistant U.S. Attorney Howard Parker with the U.S. Attorney's Office for the Western District of Louisiana, Assistant U.S. Attorney Mike Anderson with the U.S. Attorney’s Office for the Southern District of Alabama and Trial Attorney Shane N. Waller Environmental Crimes Section are prosecuting the case.

A former campaign finance manager and political consultant was sentenced today in the Eastern District of Virginia to 24 months for coordinating $325,000 in federal election campaign contributions by a political action committee (PAC) to a congressional campaign committee.  This is the first U.S. prosecution based on the coordination of campaign contributions between political committees.  

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Dana J. Boente of the Eastern District of Virginia and Acting Special Agent in Charge Jennifer Leonard of the FBI Washington, D.C., Field Office’s Criminal Division made the announcement.

“The significant prison sentence imposed on Tyler Harber should cause other political operatives to think twice about circumventing laws that promote transparency in federal elections,” said Assistant Attorney General Caldwell.  “As the first conviction for illegal campaign coordination, this case stands as an important step forward in the criminal enforcement of federal campaign finance laws.  Illegal campaign coordination can be difficult to detect, which is why we strongly encourage party or campaign insiders to come forward and blow the whistle.”

“Campaign finance laws exist to guard against illegal activity such as coordinated campaign contributions,” said U.S. Attorney Boente.  “The citizens of the commonwealth of Virginia can rely on this office enforce federal campaign finance law.”

“As the 2016 election gears up, there may be others, similar to Mr. Harber, who may view campaigns as a venue to misappropriate funds,” said Acting Special Agent in Charge Leonard.  “With millions of dollars in play, donors should be aware of how their money will be spent prior to making a donation to a super Pac to ensure that their contributions are being legally expended.”

Tyler Eugene Harber, 34, of Alexandria, Virginia, previously pleaded guilty before U.S. District Judge Liam O’Grady to one count of coordinated federal election contributions and one count of making false statements to the FBI.

Harber was the campaign manager and general political consultant for a candidate for Congress in the November 2012 general election.  At the same time, Harber participated in the creation and operation of a PAC, which, unlike the campaign of an individual candidate, may raise and spend money in unlimited amounts from otherwise prohibited sources to influence federal elections so long as it does not coordinate expenditures with a federal campaign.

In connection with his guilty plea, Harber admitted, among other things, that he caused $325,000 in coordinated contributions by directing the PAC to purchase political advertising opposing a rival candidate.  Harber admitted that he knew this coordination of expenditures was unlawful. 

Harber admitted that he used an alias and other means to deflect inquiries by a political party official.  He also admitted that he told multiple lies when interviewed by the FBI concerning his activities.

This case was investigated by the FBI’s Washington, D.C., Field Office’s Northern Virginia Resident Agency.  The case is being prosecuted by Director Richard C. Pilger of the Criminal Division’s Public Integrity Section Election Crimes Branch and Chief Mark D. Lytle of the U.S. Attorney’s Office of the Eastern District of Virginia’s Financial Crimes and Public Corruption Unit.      

 Seventeen-year-old Facilitated Travel to Syria for 18-year-old Prince William County, Virginia, Resident

Ali Shukri Amin, 17, of Manassas, Virginia, pleaded guilty today to charges of conspiring to provide material support and resources to the Islamic State in Iraq and the Levant (ISIL), a designated foreign terrorist organization.

Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Dana J. Boente of the Eastern District of Virginia and Assistant Director in Charge Andrew McCabe of the FBI’s Washington, D.C., Field Office.

“Ali Shukri Amin is a 17-year-old American who pleaded guilty to providing material support to ISIL, and he used social media to do so,” said Assistant Attorney General Carlin.  “Around the nation, we are seeing ISIL use social media to reach out from the other side of the world.  Their messages are reaching America in an attempt to radicalize, recruit and incite our youth and others to support ISIL's violent causes.  This case serves as a wake-up call that ISIL's propaganda and recruitment materials are in your communities and being viewed by your youth.  This challenge requires parental and community awareness and action to confront and deter this threat wherever it surfaces.”

“Today’s guilty plea demonstrates that those who use social media as a tool to provide support and resources to ISIL will be identified and prosecuted with no less vigilance than those who travel to take up arms with ISIL,” said U.S. Attorney Boente.  “The Department of Justice will continue to pursue those that travel to fight against the United States and our allies, as well as those individuals that recruit others on behalf of ISIL in the homeland, and prosecute them to the full extent of the law.”

In a statement of facts filed with the plea agreement, Amin admitted to using Twitter to provide advice and encouragement to ISIL and its supporters.  Amin, who used the Twitter handle @Amreekiwitness, provided instruction on how to use Bitcoin, a virtual currency, to mask the provision of funds to ISIL, as well as facilitation to ISIL supporters seeking to travel to Syria to fight with ISIL.  Additionally, Amin admitted that he facilitated travel for Reza Niknejad, an 18-year-old Prince William County resident who traveled to Syria to join ISIL in January 2015.  Niknejad was charged yesterday in the Eastern District of Virginia with conspiring to provide material support to terrorists, conspiring to provide material support to ISIL and conspiring to kill and injure people abroad.

Amin’s plea was accepted by U.S. District Court Judge Claude M. Hilton of the Eastern District of Virginia.  Amin was charged by criminal information during the court hearing today, and faces a maximum penalty of 15 years in prison if convicted.  The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.

This case was investigated by the FBI’s Washington, D.C., Field Office.  Assistant U.S. Attorney Michael P. Ben’Ary and Special Assistant U.S. Attorney Caroline H. Friedman of the Eastern District of Virginia are prosecuting the case, with the assistance of Trial Attorney Stephen Sewell of the National Security Division’s Counterterrorism Section.

Amin Plea Agreement

Amin Statement of Facts

John Huggins, 48, of Tremonton, Utah, was sentenced to 27 months in federal prison for possession of an unregistered destructive device, announced Assistant Attorney General for National Security John P. Carlin and U.S. Attorney Carlie Christensen of the District of Utah.

In July 2014, Huggins was charged in an indictment with possession of an unregistered destructive device, possession of an explosive by a restricted person, and unlawful distribution of information relating to the manufacture and use of explosives or destructive devices.  Huggins pleaded guilty in February 2015 to possession of an unregistered destructive device.

Huggins admitted in court documents that in July 2014, he possessed a partially assembled explosive device, and that he possessed the knowledge and the materials necessary, including an explosive substance, to readily assemble the device into a functioning explosive device.

According to a sentencing memorandum filed in the case, law enforcement officers received information from a confidential informant that Huggins was planning to use explosives to target the Tremonton Police Department.  The FBI then made contact with the defendant through another confidential informant.  This confidential informant met with Huggins and purchased a thumb drive containing references on how to start and train militias, and how to produce explosives.  An undercover agent, posing as a representative of an anti-government militia group, was introduced to the defendant and told Huggins he was looking for someone who could make explosives and train people in his group.  Huggins responded that he could do that, according to the sentencing memorandum.  Huggins described what he could do and expressed an extreme dislike of law enforcement based on prior interactions with police officers.

During a second meeting with the undercover agent, Huggins went to great lengths to convince the undercover agent that he could build explosives capable of killing people.  The defendant offered to come and train the undercover agent’s group for a month for a fee.  Huggins also presented and sold a notebook to the undercover agent.  The notebook included drawings detailing explosives production and writings on topics such as explosive theory and how to produce different types of explosives.

Huggins was arrested in July 2014.  According to court filings, he admitted that he was meeting with a man he believed to be a member of an extremist militia group.  He admitted that although he did not provide the undercover agent with an explosive device at their meeting, he did have an inert explosive device in his trailer that he planned to show the undercover agent.  He admitted that the device would need to be loaded first to become a bomb, but that all of the necessary components to fully assemble the explosive device were at his residence.

A further search of Huggins’ trailer yielded notebooks containing entries ranging from anti-government ideology to a system to watch and track police officers.

The case was investigated by members of the FBI’s Joint Terrorism Task Force, the Utah Department of Public Safety and the Tremonton Police Department.  The case was prosecuted by Assistant U.S. Attorneys Andrew R. Choate and Carlos A. Esqueda of the District of Utah, and Trial Attorney Clem McGovern of the National Security Division’s Counterterrorism Section.

SUMMARY:  The Executive Office for Immigration Review (EOIR) invites interested parties to participate in a teleconference and webinar providing a general overview of EOIR’s recognition and accreditation program.  This event is intended to educate interested parties about the process for obtaining recognition for an organization and accreditation for individuals.

DATE:  Friday, June 19, 2015, at 2 p.m.

RSVP:  To RSVP for the meeting, please contact Lauren Alder Reid, Counsel for Legislative and Public Affairs at 703-305-0289 or email PAO.EOIR@usdoj.gov by noon on Wednesday, June 17, 2015.  Please note that there will be no in-person attendance for this event.  EOIR will send call-in and web access information on Thursday, June 18, to those who RSVP.  To attend the meeting via conference call and web, please RSVP with the name(s) of the attendee(s), the attendee’s organization, and an email address where instructions may be sent for accessing the conference call and web meeting.

- EOIR -

The Executive Office for Immigration Review (EOIR) is an agency within the Department of Justice. Under delegated authority from the Attorney General, immigration judges and the Board of Immigration Appeals interpret and adjudicate immigration cases according to United States immigration laws. EOIR's immigration judges conduct administrative court proceedings in immigration courts located throughout the nation. They determine whether foreign-born individuals—whom the Department of Homeland Security charges with violating immigration law—should be ordered removed from the United States or should be granted relief from removal and be permitted to remain in this country. The Board of Immigration Appeals primarily reviews appeals of decisions by immigration judges. EOIR's Office of the Chief Administrative Hearing Officer adjudicates immigration-related employment cases. EOIR is committed to ensuring fairness in all of the cases it adjudicates.

A federal jury returned unanimous verdicts of guilty today against a former master deputy sheriff, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge Alysa D. Erichs of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) Miami Field Division and Sheriff Kenneth J. Mascara of the St. Lucie County, Florida, Sheriff’s Office.

Cameron Dean Bates, 49, of Port St. Lucie, Florida, was found guilty of receiving, distributing and possessing child pornography.  U.S. District Court Chief Judge K. Michael Moore of the Southern District of Florida presided over the four-day trial and set sentencing for Sept. 15, 2015.

According to testimony at trial, in March 2011, St. Lucie County Sheriff’s Office detectives and members of the South Florida Internet Crimes Against Children Task Force (ICAC) began an internet investigation using peer-to-peer (P2P) software.  During this investigation, law enforcement found that between December 2010 and June 2012, several internet protocol (IP) addresses linked to Bates in both St. Lucie County and Palm Beach County were used to download and share child pornography files.  Detectives reviewed a number of the files associated with the IP addresses and confirmed that the files contained child pornography.

On June 29, 2012, a search warrant was executed at Bates’ residence in Port St. Lucie.  During the search, law enforcement seized a Dell laptop computer from Bates’ car.  An on-sight forensic preview scan of the computer found numerous, non-deleted child pornography images and videos, which included a minor child engaging in sexually explicit conduct.  A full forensic analysis of Bates’ laptop revealed numerous images and videos of child pornography, along with adult pornography personally produced by Bates.

At trial, the government also introduced evidence recovered during a search of Bates’ residence, including a Dell laptop computer, which contained numerous, non-deleted, child pornography images and videos.  At least one image depicted a prepubescent child under the age of 12.

This case was investigated by the St. Lucie County Sheriff’s Office, the South Florida ICAC and ICE-HSI, with assistance from the Palm Beach County, Florida, Sheriff’s Office.

The case is being prosecuted by Trial Attorney Reginald E. Jones of the Criminal Division’s Child Exploitation and Obscenity Section and Assistant U.S. Attorney Ben Widlanski of the Southern District of Florida.

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child exploitation and abuse launched in May 2006 by the Department of Justice.  Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims.  For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

Younger Sibling Plotted to Attack New York City with a Weapon of Mass Destruction

Brothers Raees Alam Qazi, 22, and Sheheryar Alam Qazi, 32, both naturalized U.S. citizens from Pakistan, were sentenced today to 35 years and 20 years in prison for terrorism violations and assaulting two Deputy U.S. Marshals while in custody, announced Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Director Stacia A. Hylton of the U.S. Marshals Service and Special Agent in Charge George L. Piro of the FBI’s Miami Division.

Raees Qazi and Sheheryar Qazi were sentenced by U.S. District Court Judge Beth Bloom of the Southern District of Florida, and their prison term will be followed by a term of 10 years and five years of supervised release, respectively.

“With the sentences handed down today, Raees Qazi and his brother Sheheryar Qazi are being held accountable for their roles in a plot to conduct a terrorist attack using a weapon of mass destruction in New York City and their assault on two federal officers during their pretrial detention,” said Assistant Attorney General Carlin.  “This case highlights our commitment to pursue any individuals who would seek to conduct an attack on U.S. soil or to injure law enforcement officials who risk their lives to protect us.  I want to thank the U.S. Marshals, agents, analysts, and prosecutors who are responsible for this successful result.”

“Protecting the homeland and our national security remains our number one priority,” said U.S. Attorney Ferrer.  “Today’s sentences demonstrate this Office’s unwavering commitment to work with our law enforcement partners to combat all forms of terrorism by proactively finding and prosecuting those who actively seek to kill or harm innocent citizens in the name of violent extremism.”

“Today’s sentencing of the Qazi brothers represents the final chapter for two men who wished to bring harm and mass destruction to Americans on U.S. soil,” said Director Hylton.  “Their sentences demonstrate that justice prevailed.  I am proud of our brave men and women who participated in this process, and thank the prosecutors who worked tirelessly for this successful conclusion.”

“The threat of a terrorist attack against innocent Americans is real as demonstrated by the actions of these two brothers,” said Special Agent in Charge Piro.  “The fact that their terrorist aspirations were cut short didn’t stop Raees and Sheheryar Qazi from attempting to use potentially lethal force against two U.S. Marshals while they were in custody.  This case highlights outstanding work and team effort of our South Florida Joint Terrorism Task Force.”

On March 12, 2015, Raees Alam Qazi pleaded guilty to one count of conspiring to provide material support and resources to terrorists in preparation for the use of a weapon of mass destruction, one count of attempting to provide material support to a designated foreign terrorist organization and one count of conspiring to assault a federal employee.  Sherheyar Alam Qazi pleaded guilty to one count of conspiring to provide material support and resources to terrorists in preparation for the use of a weapon of mass destruction and one count of conspiring to assault a federal employee.

The brothers acknowledged during the plea hearing that Raees Alam Qazi was going to initiate an attack using a weapon of mass destruction in New York City and that he had been financially and emotionally supported by his older brother, Sheheryar Alam Qazi, who encouraged him to launch the attack.  Among other things, the brothers acknowledged that Sheheryar Alam Qazi had encouraged his younger brother to travel from Pakistan to Afghanistan in 2011, and that when Raees Alam Qazi had been unsuccessful in his attempt to enter Afghanistan, he returned to his older brother.  The brothers acknowledged that Raees Alam Qazi had been trying to reach the “guys from Yemen” aka Al Qaeda in the Arabian Peninsula (AQAP) on the internet and that they told him not to come to Afghanistan because there were enough people, but instead suggested they do something in the United States.  Raees Alam Qazi admitted that he had taken “hints” from an AQAP online publication entitled Inspire Magazine, including building an explosive device using Christmas tree light bulbs.  Raees Alam Qazi also conceded that he had used information in Inspire to communicate with AQAP, and that his communications with Al Qaeda dealt with his desires to launch an attack in the United States.

The brothers acknowledged that Raees Alam Qazi travelled to New York in November 2012 to conduct an attack with a weapon of mass destruction while Sheheryar Alam Qazi actively misled friends and family members about Raees Alam Qazi’s true whereabouts and activities.  The brothers acknowledged that Raees Alam Qazi called Sheheryar Alam Qazi from New York to notify him that he had not been successful in his task.  Sheheryar Alam Qazi encouraged Raees Alam Qazi to return to “practice over here [Florida] then you may return [to New York] you know…. I will give you complete freedom.”

The brothers additionally admitted their participation in a conspiracy to assault federal officers.  They conceded that on April 8, 2014, while being moved within the U.S. Courthouse complex in Miami, they simultaneously punched two Deputy U.S. Marshals in the face and struggled with them and attempted to use potentially lethal force on them.  Raees Alam Qazi and Sheheryar Alam Qazi acknowledged that while struggling with the Deputy U.S. Marshals, the defendants simultaneously exclaimed “Allahu Akbar,” an Arabic exhortation meaning “God is Great.”

The case was investigated by the FBI’s South Florida Joint Terrorism Task Force.  The case is being prosecuted by Assistant U.S. Attorneys Karen E. Gilbert and Adam S. Fels of the Southern District of Florida, and Trial Attorney Jennifer E. Levy of the National Security Division’s Counterterrorism Section.

A Puerto Rico Superior Court Judge was sentenced today to 10 years in prison today after being convicted earlier this year of accepting bribes to acquit a businessman of vehicular homicide charges.  Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Rosa Emilia Rodríguez-Vélez of the District of Puerto Rico made the announcement.

In January, a federal jury convicted Judge Manuel Acevedo-Hernandez, 63, of Aguadilla, Puerto Rico, of conspiracy to commit federal programs bribery and receipt of a bribe by an agent of an organization receiving federal funds.  Chief U.S. District Judge Aida M. Delgado of the District of Puerto Rico imposed the sentence.

Acevedo-Hernandez presided over the trial of Lutgardo Acevedo-Lopez, 39, a certified public accountant in Aguadilla, Puerto Rico.  Acevedo-Lopez was charged with criminal vehicular homicide based on his role in a June 2012 collision involving the vehicle he was driving and another car, which resulted in the death of the other driver.

According to the evidence presented at trial, Acevedo-Lopez used an intermediary to bribe Acevedo-Hernandez by paying taxes owed by Acevedo-Hernandez; paying for the construction of a garage for Acevedo-Hernandez's home; and providing Acevedo-Hernandez with a motorcycle, clothing and accessories, including cufflinks and a watch.  In exchange, Acevedo-Hernandez acquitted Acevedo-Lopez of all charges.

In August 2014, Acevedo-Lopez pleaded guilty to conspiracy to commit federal programs bribery and to paying a bribe to an agent of an organization receiving federal funds.  Acevedo-Lopez has not yet been sentenced.

The case was investigated by the FBI’s San Juan Division.  The case was prosecuted by Trial Attorneys Peter Mason and Menaka Kalaskar of the Criminal Division’s Public Integrity Section and First Assistant U.S. Attorney Timothy Henwood and Assistant U.S. Attorney Jose Capó of the District of Puerto Rico.

The leaders of a violent loan sharking and illegal gambling ring that operated out of several Philadelphia businesses were sentenced today to serve 168 months and 147 months in prison, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania.

Ylli Gjeli, 49, and Fatimir Mustafaraj, also known as Tony, 42, both of Philadelphia, were previously convicted following a six-week jury trial of engaging in a racketeering conspiracy, collection of unlawful debts, extortion and illegal gambling.  Two other defendants were convicted of various related charges in the same trial and are scheduled to be sentenced at a later date.  Gjeli and Mustafaraj were sentenced today by U.S. District Court Judge William H. Yohn Jr. of the Eastern District of Pennsylvania.

According to evidence presented at trial, the defendants’ enterprise used businesses in Philadelphia, including the Lion Bar & Grill, Blackbird Café and Ylli’s 2 Brothers, to conduct the illegal loan sharking and gambling activities.  The enterprise generated money by making and collecting on loans with usurious rates of interest, and making loans to customers whose debts were incurred through the enterprise’s illegal gambling business.  The evidence established that from October 2011 to 2013 alone, the enterprise extended 125 usurious loans totaling $1.78 million with annual interest rates ranging from 104 percent to 395 percent.  Further, the evidence established that from February 2007 to August 2013, the organization’s online sports betting website contributed more than $2.9 million in gross profits. 

The evidence showed that members and associates of the enterprise cultivated their reputations within the organization by threatening customers with dangerous weapons such as firearms and a hatchet, threatening to kill, assault or “break the legs” of delinquent customers if they did not pay their debts, and physically assaulting subordinate members and associates who stole from the organization.

According to the evidence presented at trial, Gjeli was a “boss” of the multi-million dollar criminal organization.  Mustafaraj served as “muscle” to forcefully collect debts owed to the organization.  Both defendants directed the other members in the loan sharking activities and illegal gambling business, financed loans and the gambling operation, used intimidation and threats of violence against customers to collect loan payments, and physically assaulted subordinate members and associates who stole from the organization.

The evidence also demonstrated that the defendants attempted to conceal the existence and operations of the enterprise from law enforcement by limiting their discussions of criminal activities when on the phone, using cryptic and coded language to describe criminal activities, conducting pat-downs and body searches of customers to check for weapons and recording devices, and conducting the enterprise’s transactions primarily in cash.

Five co-defendants who previously pleaded guilty are awaiting sentencing.

The case was investigated by the FBI, Internal Revenue Service-Criminal Investigation, the Pennsylvania State Police, Montgomery County, Pennsylvania, Detectives and the New Jersey State Police.  The case is being prosecuted by Trial Attorney Margaret Vierbuchen of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Salvatore L. Astolfi and Jerome Maiatico of the Eastern District of Pennsylvania.

The Justice Department announced today that it has opened an investigation of the Arkansas Department of Corrections’ McPherson Unit, the state prison for women in Newport, Arkansas.  The investigation will focus on whether women confined at McPherson have been subjected to sexual abuse and sexual harassment by correctional staff.  The investigation will also examine the prison’s treatment of transgender prisoners.  

The department has received numerous allegations of sexual abuse and sexual harassment of prisoners by multiple members of McPherson Unit staff.  Allegations include staff engaging in sexual intercourse and other sexual acts with prisoners; exchanging commissary money for sexual favors; and inappropriately watching prisoners while they shower or change clothes, commenting on their private parts and, at times, taking photos or video for reasons unrelated to correctional goals.

“Staff sexual abuse of prisoners violates the constitutional rights of prisoners, undermines prison safety and security and can lead to other crimes,” said the head of the Civil Rights Division, Principal Deputy Assistant Attorney General Vanita Gupta.  “This investigation furthers the Justice Department’s goal of zero-tolerance for sexual abuse and sexual harassment in our nation’s jails and prisons.  We hope to work cooperatively with the state of Arkansas in conducting our inquiry and ensuring that prisoners in its custody are not being sexually abused.”

The department has not reached any conclusions regarding the allegations in this matter.  As the investigation moves forward, the department will work to determine whether McPherson prisoners are subjected to a pattern or practice of sexual abuse and sexual misconduct in violation of their constitutional rights. 

The investigation will be conducted under the Civil Rights of Institutionalized Persons Act (CRIPA).  Under CRIPA, the department is authorized to investigate potential violations of the constitutional rights of prisoners in prisons or jails operated by state or local governments when there appears to be a pattern or practice of such violations.  The department has conducted similar investigations in other jurisdictions, and recently entered into settlement agreements that are expected to lead to important reforms following its investigations of staff sexual abuse of women prisoners in Kansas and Alabama. 

The Special Litigation Section of the Civil Rights Division is conducting this investigation.  Individuals with relevant information are encouraged to contact the department via email at Community.McPherson@usdoj.gov.

 Defendant Allegedly Was Part of ISIL Foreign Fighter Support Network and Solicited Funds to Send a Co-Defendant Overseas to Join ISIL

Earlier today, a second superseding indictment was unsealed charging Akmal Zakirov, 29, an Uzbeki national, with attempt and conspiracy to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization.  The defendant, who is charged along with four Brooklyn, New York, residents whose arrests have previously been announced, is scheduled to be arraigned at 2:00 p.m. today before U.S. Magistrate Judge Viktor V. Pohorelsky of the Eastern District of New York.

The charges were announced by Assistant Attorney General for National Security John P. Carlin, Acting U.S. Attorney Kelly T. Currie of the Eastern District of New York, Assistant Director in Charge Diego G. Rodriguez of the FBI’s New York Field Office, Commissioner William J. Bratton of the New York City Police Department (NYPD) and Special Agent in Charge Raymond R. Parmer Jr. of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) New York Field Office.

As alleged in the indictment and other court filings, the investigation began last year when Abdurasul Hasanovich Juraboev, one of Zakirov’s co-defendants, came to the attention of law enforcement.  Juraboev posted on an Uzbek-language website that propagates ISIL’s ideology his offer to engage in an act of martyrdom on U.S. soil on behalf of ISIL, such as killing the President of the United States.  The investigation subsequently revealed that Juraboev and another co-defendant, Akhror Saidakhmetov, planned to travel to Turkey and then to Syria for the purpose of waging violent jihad on behalf of ISIL.  Saidakhmetov was arrested on Feb. 25, 2015, at John F. Kennedy International Airport in New York City, where he was attempting to board a flight to Istanbul.  Juraboev previously purchased a plane ticket to travel from New York to Istanbul and was scheduled to leave the United States in March 2015.

Zakirov, co-defendant Abror Habibov and others allegedly helped to fund Saidakhmetov’s efforts to join ISIL.  Specifically, Zakirov and Habibov discussed providing their own money to purchase Saidakhmetov’s plane ticket and to cover his travel expenses, and they also solicited money for that purpose from other individuals.  In the week leading up to Saidakhmetov’s scheduled departure, several individuals transferred a total of approximately $2,400 into Zakirov’s personal bank account, funds which were intended to facilitate Saidakhmetov’s travel to join ISIL.

“Zakirov is the fifth to be charged as part of the network of individuals alleged to have conspired and attempted to provide material support to ISIL,” said Acting U.S. Attorney Currie.  “Our efforts to investigate terrorist support groups are ongoing -- we are committed to disrupting and deterring those who seek to support ISIL, whether by lending themselves or their funds to ISIL’s cause.”

“Any material support of a terrorist organization not only threatens our national security but violates federal law,” said Assistant Director in Charge Rodriguez.  “In this case, Zakirov is alleged to have been part of a team committed to financing terrorist efforts.  Fortunately, the FBI’s Joint Terrorism Task Force identified and stopped such activity.  We will continue to work with our partners to uphold our mission and proactively protect the people of the U.S., both home and abroad, through these types of intelligence-based investigations.”

“This indictment illustrates the NYPD’s ongoing commitment to stem the efforts of organizations such as ISIL who do not hesitate to promote their violent ideology both here and abroad,” said Commissioner Bratton.  “I would like to commend the efforts of the Joint Terrorism Task Force investigators, along with our many law enforcement partners, who continue to thwart the efforts of those who would advance a terrorist agenda.”

“Providing material support to terrorist organizations that seek to do us harm represents a clear and present danger to the United States,” said Special Agent in Charge Parmer.  “Today’s indictment should serve as a warning to all those who attempt to assist ISIL and other terrorist organizations that no stone will go unturned to identify, apprehend, and have them prosecuted to the fullest extent of the law.”

If convicted, Zakirov faces a maximum sentence of 30 years in prison.  The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.

Assistant Attorney General Carlin joined Acting U.S. Attorney Currie in extending his grateful appreciation to the FBI’s Joint Terrorism Task Force, which comprises a large number of federal, state and local agencies from the region.  The case is being prosecuted by Assistant U.S. Attorneys Alexander A. Solomon, Douglas M. Pravda and Peter W. Baldwin of the Eastern District of New York, with assistance provided by Trial Attorney Danya Atiyeh of the Justice Department’s Counterterrorism Section.

Zakirov Superseding Indictment

In the second year of the implementation of the standards set forth in the Prison Rape Elimination Act (PREA), 50 jurisdictions submitted statements of compliance or assurances that they commit to spend 5 percent of certain Department of Justice grant funds to come into compliance.  In FY 2015, 10 states certified that they are in full compliance with the PREA standards.  These states are Iowa, Maine, Mississippi, Missouri, New Hampshire, New Jersey, North Dakota, Oregon, Tennessee and Washington.  In FY 2015, 40 jurisdictions submitted an assurance.  In FY 2014, the first year of implementation of the PREA standards, 48 of the 56 jurisdictions subject to PREA were either in compliance or submitted assurances to spend 5 percent of certain grant funds to come into compliance.  The department saw a significant increase in states that have attained full compliance this year.  In FY2014 two states submitted certifications.

“The very hard work of implementing new policies and practices, and transforming cultures in confinement agencies and facilities in ways that promote the sexual safety of inmates, residents and detainees, is well underway,” said Assistant Attorney General Karol V. Mason of the Office of Justice Programs.  “The large number of jurisdictions that submitted certifications and assurances this year to the Department of Justice, the significant numbers of agencies and facilities that are conducting PREA audits and the increasing support for PREA in the law enforcement and corrections fields suggest a building momentum.  We are committed to increasing this momentum, and working with the remaining five states and the one territory that did not respond.”

Certifications, assurances and related documentation were submitted to the Bureau of Justice Assistance (BJA), a component of Department of Justice’s Office of Justice Programs (OJP), and are available at https://www.bja.gov/Programs/15PREA-AssurancesCertifications.pdf. 

The PREA statute, which was passed in 2003 with unanimous support from both chambers of Congress, required the establishment of the national PREA standards for the detection, prevention, reduction and punishment of prison rape.  The standards took effect on Aug. 20, 2012, and apply to federal, state and local confinement facilities which includes adult prisons and jails, juvenile facilities, lockups and community confinement facilities.

Understanding that the standards could take a number of years to fully implement, the PREA statute allows a governor whose state or territory is not yet in full compliance to submit an assurance to the Department of Justice that not less than 5 percent of certain Department of Justice grant funds will be used solely for the purpose of enabling the jurisdiction to achieve and certify full compliance with the standards in future years.  A total of 56 jurisdictions are subject to PREA – 50 states, five territories and the District of Columbia.  The six jurisdictions that are unwilling to commit department grant funds to implement the national PREA standards are subject to the loss of 5 percent of certain Department of Justice grant funds they would otherwise receive.  In FY2014, eight jurisdictions were unwilling to commit department grant funds to implement the standards.

Information about grant funds impacted by PREA in FY 2014 and FY 2015 is available in the PREA section of BJA’s web page.  This information includes lists of FY 2014 department grant reductions (in jurisdictions that submitted neither an assurance nor a certification) and reallocations (in jurisdictions that submitted an assurance) amounts by state and territory, and a summary of PREA implementation activities supported by FY 2014 Department of Justice reallocation grants.  Department grant reduction and reallocation amounts for FY 2015, along with a summary of activities supported by reallocation grants, will be posted on BJA’s web page as soon as they are finalized.

To assist states and localities with implementation, BJA has funded the National PREA Resource Center to provide training and technical assistance for those in the field who are working to come into compliance with the standards.  These resources are available at www.prearesourcecenter.org.

About the Office of Justice Programs (OJP)

OJP, headed by Assistant Attorney General Mason, provides federal leadership in developing the nation’s capacity to prevent and control crime, administer justice and assist victims.  OJP has six components: BJA, the Bureau of Justice Statistics, the National Institute of Justice, the Office of Juvenile Justice and Delinquency Prevention, the Office for Victims of Crime and the Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering and Tracking.  To learn more about OJP, visit www.ojp.gov.

Two Georgia sisters-in-law were sentenced today in the U.S. District Court in Macon, Georgia, for their involvement in a conspiracy to defraud the United States, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Michael J. Moore of the Middle District of Georgia.

Angela Miller, 48, of Milledgeville, Georgia, and Lee Lynwood, 47, of Eatonton, Georgia, were each sentenced to serve 12 months and one day in prison to be followed by one year of supervised release, and ordered to pay restitution in the amount of $44,214.62.  On Feb. 10, Miller and Lynwood pleaded guilty to conspiracy to defraud the United States.

According to court documents, from at least January 2008 through at least March 2010, Miller and Lynwood operated a tax return preparation business and conspired to inflate their clients’ federal tax refunds by manipulating the tax returns to reflect false business income or loss amounts and to claim deductions and credits, such as the First-Time Homebuyer Credit, that the clients were not entitled to receive.

Miller and Lynwood also took steps to continue their scheme by impeding the Internal Revenue Service’s (IRS) efforts to shut down their ability to electronically file tax returns.  In May 2008, the IRS notified Miller and Lynwood that their Electronic Filing Number (EFIN) for filing electronic returns at their tax preparation business, A&L Tax Services, was being revoked.  Miller and Lynwood then had an acquaintance apply for another EFIN in her name, which Miller and Lynwood used to continue to file fraudulent tax returns and conceal their preparation from the IRS.  Further, Miller and Lynwood changed the name of their business to B&F Tax Services and caused a bank account for the B&F Tax Services to be opened in the acquaintance’s name as a nominee. 

Acting Assistant Attorney General Ciraolo commended special agents of IRS–Criminal Investigation, who investigated the case, and thanked the U.S. Attorney’s Office of the Middle District of Georgia for their assistance, as well as Trial Attorneys Alexander R. Effendi and Hayden M. Brockett of the Tax Division, who prosecuted the case.

Three Deputies Also Convicted of Obstructing Justice by Covering Up a Fellow Officer’s Use of Force

A federal jury in Albany, Georgia, today convicted three sheriff’s deputies on various federal offenses related to the cover-up of a 2012 incident in which a fourth deputy used force during the arrest of a civilian.  The charges against Decatur County Captain Elizabeth Croley, Decatur County Deputy Christopher Kines and Decatur County Deputy Robert Wade Umbach related to a September 2012 incident in which former Grady County Deputy Sheriff Wiley Griffin, IV—who is the son of Decatur County Sheriff Wiley Griffin, III— used force against Aaron Parrish during an arrest at the Bainbridge BikeFest.  The jury found that Croley, Kines and Umbach obstructed justice when they later helped cover up defendant Griffin’s actions.  Specifically, the jury convicted Croley of obstructing justice by writing a false report and convicted Kines and Umbach of engaging in misleading conduct by lying to an FBI agent about the incident.  Croley was also convicted of violating Aaron Parrish’s constitutionally protected right to a fair trial by intentionally withholding material exculpatory evidence from the District Attorney’s Office, and, in turn from Aaron Parrish’s criminal defense attorney, during a criminal prosecution of Parrish arising out of the same BikeFest incident. 

Croley, Kines and Umbach will be sentenced by the Honorable W. Louis Sands, Senior U.S.District Court Judge for the Middle District of Georgia, at a later date to be set by the court.

The same jury that convicted the three Decatur County officers of obstruction acquitted Griffin on a civil rights count charging him with having used excessive force against Parrish and acquitted Kines and Umbach of obstructing justice by writing false reports. 

During a trial that lasted more than two weeks, the jury heard evidence that Griffin struck Parrish in the eye with a metal flashlight while Parrish was being restrained on the ground by other deputies, including Kines and Umbach.  The government presented evidence that Captain Croley and Deputies Kines and Umbach then helped cover up the incident by, among other things, Croley writing a false report and Kines and Umbach misleading the FBI by stating that they did not see Griffin at the scene.

The government also presented evidence that, after Parrish complained to the Decatur County Sheriff’s Office about the abuse he had suffered at BikeFest, the Sheriff’s Office opened a criminal investigation led by Croley that eventually resulted in felony criminal charges against Parrish.  During that investigation, Croley took a witness statement from a civilian eyewitness who provided information that would have been materially helpful to Parrish’s defense.  However, rather than providing that statement to the District Attorney so that it could then be provided to Parrish’s defense attorney for use at trial, Croley intentionally removed the exculpatory statement from the case file.  This conduct formed the basis of the civil rights charge on which defendant Croley was convicted.

At sentencing, Croley will face a maximum sentence of 20 years for her false report and one year for the civil rights violation involving hiding exculpatory evidence.  Kines and Umbach face maximum sentences of 20 years for making misleading statements to the FBI. 

“As the jury recognized through its verdict, there are serious consequences when law enforcement officers lie to cover up the misconduct of a fellow officer and when an officer intentionally stacks the deck against an accused person by hiding evidence that could show the person’s innocence,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division.  “When officers engage in this type of outrageous behavior, the Department of Justice stands ready to enforce the law and protect the civil rights of all Americans.”

“This case reflects that the rule of law applies to all and that the FBI will present for prosecution the facts as it finds them,” said Special Agent in Charge J. Britt Johnson of the FBI Atlanta Field Office.  “Today's verdicts conclude an extensive investigation and prosecution that needed to be heard and the FBI is satisfied that it was."

This case was investigated by the Federal Bureau of Investigation and was prosecuted by Trial Attorneys Christine M. Siscaretti and Risa Berkower of the Justice Department’s Civil Rights Division, with support from the U.S. Attorney’s Office for the Middle District of Georgia.

One member of the Universal Aryan Brotherhood (UAB) prison gang pleaded guilty today to an indictment charging him with conspiracy to participate in a racketeering enterprise and conspiracy to possess with intent to distribute methamphetamine, announced Assistant Attorney General ­­­­­­­Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Danny C. Williams Sr. of the Northern District of Oklahoma.

Anthony Ramon Hall, 39, of Tulsa, Oklahoma, pleaded guilty before U.S. District Court Judge Claire V. Eagan of the Northern District of Oklahoma.  In addition, on June 2, 2015, UAB associate Carl Matthew Smith, 37, of Tulsa, pleaded guilty to conspiracy to participate in a racketeering enterprise and conspiracy to possess with intent to distribute methamphetamine.  On June 4, 2015, UAB associate Robert Allen Paul Bryan, 40, of Tulsa, pleaded guilty to one count of violence in aid of racketeering connected to the maiming of a former UAB member.  Hall’s sentencing is set Sept. 24, 2015, Smith’s sentencing is set for Sept. 3, 2015.  Bryan’s sentencing is set for Sept. 22, 2015.

In connection with their guilty pleas, Hall and Smith acknowledged their membership in or association with the UAB, a violent, “whites only” prison-based gang with members and associates operating inside and outside of state prisons throughout Oklahoma.  Hall also admitted that he held a leadership position in the UAB’s “main council,” which is the supreme governing body of the UAB.  The main council has the authority to issue direct orders, vote on the admission of new members or prospects, declare war on rival gangs and mete out punishment for violation of UAB bylaws.

Hall and Smith further admitted to advancing the UAB enterprise by selling methamphetamine.  Specifically, Hall admitted to using smuggled cell phones to coordinate the delivery, receipt and sale of methamphetamine from prison by UAB members and associates outside of prison who would then return profits to him.  Hall also admitted to coordinating the firebombing of a car belonging to a person he believed had stolen from UAB’s methamphetamine enterprise.  Smith admitted to selling methamphetamine and marijuana for the benefit of the UAB as well, and to delivering drug proceeds to UAB members in prison.

During his plea proceedings, Bryan admitted to participating in the May 2013 maiming of a former UAB member.  Specifically, Bryan admitted that he and UAB members, operating on orders from the main council, restrained the victim while additional gang members used a heated knife to burn off the victim’s UAB neck tattoo.

This case was investigated by the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; Tulsa, Oklahoma, Police Department; Bureau of Alcohol, Tobacco, Firearms and Explosives; Internal Revenue Service-Criminal Investigations Division; FBI; Tulsa County Sheriff’s Office; and the Oklahoma Department of Corrections.  The case is being prosecuted by John C. Hanley of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Allen Litchfield and Jan Reincke of the Northern District of Oklahoma.

Société Générale Private Banking Will Pay $17.807 Million Penalty and Berner Kantonalbank AG Will Pay $4.619 Million Penalty; Both Continue to Cooperate With Department of Justice

The Department of Justice announced today that two banks, Société Générale Private Banking (Suisse) SA (SGPB-Suisse) and Berner Kantonalbank AG (BEKB), have reached resolutions under the department’s Swiss Bank Program.

“As the agreements reached today confirm, Swiss banks that helped U.S. taxpayers to hide foreign accounts and evade their U.S. tax obligations are providing a detailed account of their cross-border banking activities. The banks are naming officers, employees and others who facilitated this conduct, and providing information that helps us track assets that accountholders moved to other banks and other countries,” said Acting Assistant Attorney General Caroline D. Ciraolo of the Department of Justice’s Tax Division.  “Using information gathered from the banks in this program, we have identified and are investigating individuals, both domestic and foreign, who helped U.S. taxpayers dodge their obligations.”

The Swiss Bank Program, which was announced on Aug. 29, 2013, provides a path for Swiss banks to resolve potential criminal liabilities in the United States.  Swiss banks eligible to enter the program were required to advise the department by Dec. 31, 2013, that they had reason to believe that they had committed tax-related criminal offenses in connection with undeclared U.S.-related accounts.  Banks already under criminal investigation related to their Swiss-banking activities and all individuals were expressly excluded from the program.

Under the program, banks are required to:

• Make a complete disclosure of their cross-border activities;

• Provide detailed information on an account-by-account basis for accounts in which U.S. taxpayers have a direct or indirect interest;

• Cooperate in treaty requests for account information;

• Provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed;

• Agree to close accounts of accountholders who fail to come into compliance with U.S. reporting obligations; and

• Pay appropriate penalties.

Swiss banks meeting all of the above requirements are eligible for a non-prosecution agreement.

According to the terms of the non-prosecution agreements signed today, each bank agrees to cooperate in any related criminal or civil proceedings, demonstrate its implementation of controls to stop misconduct involving undeclared U.S. accounts and pay penalties in return for the department’s agreement not to prosecute these banks for tax-related criminal offenses.

SGPB-Suisse has had a presence in Switzerland since 1926, and had a U.S.-licensed representative office in Miami from the early 1990s until it closed on Aug. 26, 2013.  SGPB-Suisse opened and maintained accounts for accountholders who had U.S. tax reporting obligations, and was aware that U.S. taxpayers had a legal duty to report to the Internal Revenue Service (IRS) and pay taxes on all of their income, including income earned in SGPB-Suisse accounts.  SGPB-Suisse knew that it was likely that certain U.S. taxpayers who maintained accounts at the bank were not complying with their U.S. income tax obligations.

SGPB-Suisse’s U.S. cross-border banking business aided and assisted some U.S. clients in opening and maintaining undeclared accounts in Switzerland and concealing the assets and income the clients held in their accounts from the IRS.  SGBP-Suisse used a variety of means to assist U.S. clients in hiding their assets and income, including opening and maintaining accounts for U.S. taxpayers in the name of non-U.S. entities, including sham entities, thereby assisting such U.S. taxpayers in concealing their beneficial ownership of the accounts.  Such entities included Panama and British Virgin Island corporations, as well as Liechtenstein foundations.  In two instances, an SGPB-Suisse employee acted as a director of entities that had U.S. taxpayers as beneficial owners.  In another instance, upon the death of the beneficial owner of an entity, the heirs opened accounts held by sham entities at SGPB-Suisse to receive their shares of the assets from the entity account.

SGPB-Suisse further provided numbered accounts, allowing the accountholder to replace his or her identity with a code name or number on documents sent to the client, and held statements and other mail at its offices in Switzerland, rather than sending them to the U.S. taxpayers in the United States.  In addition to these services, SGPB-Suisse:

• Processed requests from U.S. taxpayers for cash or gold withdrawals so as not to trigger any transaction reporting requireents;

• Processed requests from U.S. taxpayers to transfer funds from U.S.-related accounts at SGPB-Suisse to accounts at subsidiaries in Lugano, Switzerland, and the Bahamas;

• Opened accounts for U.S. taxpayers who had left UBS when the department was investigating that bank;

• Processed requests from U.S. taxpayers to transfer assets from accounts being closed to other SGPB-Suisse accounts held by non-U.S. relatives and/or friends; and

• Followed instructions from U.S. beneficial owners to transfer assets to corprate and individual accounts at other banks in Switzerland, Hong Kong, Israel, Lebanon, Liechtenstein and Cyprus.

Throughout its participation in the Swiss Bank Program, SGPB-Suisse committed to full cooperation with the U.S. government.  For example, SGPB-Suisse described in detail the structure of its U.S. cross-border business, including providing a list of the names and functions of individuals who structured, operated or supervised the cross-border business at SGPB-Suisse; a summary of U.S.-related accounts by assets under management; written narrative summaries of 98 U.S.-related accounts; and the circumstances surrounding the closure of relevant accounts holding cash or gold.  SGPB-Suisse also provided information to make treaty requests to the Swiss competent authority for U.S. client account records.

Since Aug. 1, 2008, SGPB-Suisse held and managed approximately 375 U.S.-related accounts, which included both declared and undeclared accounts, with a peak of assets under management of approximately $660 million.  SGPB-Suisse will pay a penalty of $17.807 million.

BEKB was founded in 1834 as Kantonalbank von Bern, the first Swiss cantonal bank.  BEKB is based in the Canton of Bern and presently has 73 branches in Switzerland.  BEKB knew or had reason to know that it was likely that some U.S. taxpayers who maintained accounts at BEKB were not complying with their U.S. reporting obligations.  BEKB opened, serviced and profited from accounts for U.S. clients who were not complying with their income tax obligations.

BEKB provided services that facilitated some U.S. clients in opening and maintaining undeclared accounts in Switzerland and concealing the assets in those accounts and related income.  These services included opening and maintaining numbered accounts, allowing clients to use code names rather than full account numbers and providing hold mail services.  BEKB opened accounts for account holders who exited other Swiss banks and accepted deposits of funds from those banks.  BEKB also processed standing orders from U.S. persons to transfer amounts under $10,000 from their U.S.-related accounts.  In one instance, a relationship manager asked an accountholder, who was a dual Swiss-U.S. citizen living in the United States, about the Foreign Account Tax Compliance Act (FATCA) and voluntary disclosure.  When the accountholder failed to execute FATCA-related documents, BEKB took steps to close the account.  In connection with that closing, the accountholder withdrew $70,000 and approximately 500,000 Swiss francs in cash.

BEKB committed to full cooperation with the U.S. government throughout its participation in the Swiss Bank Program.  As part of its cooperation, BEKB provided a list of the names and functions of 16 individuals who structured, operated or supervised its cross-border business.  These individuals served as the chairman of the board of directors, members of the executive board, regional managers, heads of departments or heads of divisions.  BEKB additionally provided information concerning its relationship managers and external asset managers, and it described in detail the structure of its cross-border business with U.S. persons, including narrative descriptions of high-value U.S.-related accounts and U.S.-related accounts held by entities.

Since Aug. 1, 2008, BEKB held approximately 720 U.S.-related accounts, which included both undeclared and not undeclared accounts, with total assets of approximately $176.5 million.  BEKB will pay a penalty of $4.619 million.

In accordance with the terms of the Swiss Bank Program, each bank mitigated its penalty by encouraging U.S. accountholders to come into compliance with their U.S. tax and disclosure obligations.  While U.S. accountholders at these banks who have not yet declared their accounts to the IRS may still be eligible to participate in the IRS Offshore Voluntary Disclosure Program, the price of such disclosure has increased.

“These two resolutions with Société Générale Private Banking (Suisse) SA and Berner Kantonalbank AG represent the ongoing commitment by the IRS and the Department of Justice to ensure that U.S. taxpayers report foreign bank accounts and pay taxes on all income earned from those accounts,” said Deputy Commissioner Douglas O’Donnell of the IRS Large Business & International Division.  “We are encouraged by the Justice Department’s program success and look forward to additional information to further our investigations of those who have evaded detection and reporting as well as those who have aided them.”

Most U.S. taxpayers who enter the IRS Offshore Voluntary Disclosure Program to resolve undeclared offshore accounts will pay a penalty equal to 27.5 percent of the high value of the accounts.  On Aug. 4, 2014, the IRS increased the penalty to 50 percent if, at the time the taxpayer initiated their disclosure, either a foreign financial institution at which the taxpayer had an account or a facilitator who helped the taxpayer establish or maintain an offshore arrangement had been publicly identified as being under investigation, the recipient of a John Doe summons or cooperating with a government investigation, including the execution of a deferred prosecution agreement or non-prosecution agreement.  With today’s announcement of these non-prosecution agreements, noncompliant U.S. accountholders at these banks must now pay that 50 percent penalty to the IRS if they wish to enter the IRS Offshore Voluntary Disclosure Program.

“The bank agreements announced today continue to change the landscape in the offshore banking world,” said Chief Richard Weber of IRS-Criminal Investigation. “With each additional agreement, the world where criminals can hide their money is becoming smaller and smaller.  Those who circumvent offshore disclosure laws have little room to hide.”

Acting Assistant Attorney General Ciraolo thanked the IRS, in particular, IRS-Criminal Investigation and the IRS Large Business & International Division for their substantial assistance, as well as Karen M. Quesnel, who served as counsel on these matters, Senior Litigation Counsel Nanette L. Davis, and Senior Counsel for International Tax Matters and Coordinator of the Swiss Bank Program Thomas J. Sawyer of the Tax Division.

Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.

The Crime Museum announces the wildlife trafficking exhibit is now officially open. The exhibit, titled “Ivory, Tortoise Shell & Fur: The Ugly Truth of Wildlife Trafficking,” was unveiled to a large group made up of celebrities, government officials, and journalists who came together to support this important cause and see and learn more about wildlife trafficking. Following the unveiling, the exhibit is now open to the public, who are invited to attend and learn about the horrors of the wildlife trafficking industry that plagues the world.

“We are excited to be bringing this information to the masses,” states Janine Vaccarello, chief operating officer of the Crime Museum.  “This is truly a big step in the right direction when it comes to curbing the illegal wildlife trafficking industry. The more the public learns about it, the more empowered they will be to help end it.”

Wildlife trafficking is an issue that President Obama has spoken about, calling it a security issue, as well as celebrities, such as Russell Simmons, who are speaking out about the atrocities that are decimating particular animal populations around the world.

“Interpol and its Environmental Security section are committed to the protection of wildlife, natural resources, and biodiversity around the world,” stated Interpol Washington Director Shawn A. Bray. “Interpol and its law enforcement partners in all 190 member countries, including Interpol Washington, will continue building partnerships and awareness of environmental crime, as seen here tonight with the opening of this exhibit. Together, we will ensure we win the fight against transnational environmental crime.”

Many people are unaware of how critical the situation has become, yet the statistics are alarming. It’s estimated that 97 percent of the world’s tigers have been lost in the last century, 76 percent of elephants have been lost during the last 13 years, and over 1,200 rhinoceros were killed last year alone. These animal populations have been depleted to supply black market demand for jewelry, souvenirs, and natural medicines and status symbols such as shark fin soup.

"The exhibit shows the horrible suffering inflicted on individual animals for illegal and unnecessary trinkets," says Beth Allgood, US Campaigns Director at IFAW.  "Raising awareness is a critical step in making the world safer for wildlife."

“It could not have been a better event,” shares Dr. Jennifer Sevin, Ph.D., president of  Youth Environmental Programs, Inc. “There were excellent speakers, a great venue, and the opening of an important exhibit on World Environment Day. As many of the speakers at the opening mentioned, the Crime Museum is an excellent venue to bring awareness of wildlife trafficking to the public.”

The Wildlife Trafficking exhibit will be at the Crime Museum from June 2015 through February 2016, giving visitors an opportunity to see if they are contributing to the problem, and how they can help. The Crime Museum also offers a variety of other temporary and traveling exhibits, summer camp programs, walking tours, educational hands-on exhibits, and more. For more information to purchase tickets, visit their site at www.crimemuseum.org. To get involved, use and search for #ProtectOurWildlife and #SavetheElephants, or buy an awareness t-shirt, with proceeds going to the Youth Environmental Programs.

This exhibit is made possible by Freeland Foundation, International Fund for Animal Welfare, INTERPOL, Kashmir World Foundation, U.S. Department of State, U.S. Fish and Wildlife Service, WildAid, Wildlife Trust of India and Youth Environmental Programs.

About the Crime Museum
Crime Museum is located in Washington D.C. The mission is to provide guests of all ages with memorable insight into the issues of crime, crime fighting, and the consequences of committing a crime in America, through an interactive, entertaining, and educational experience. The museum offers walking tours, summer camps, galleries, a crime library, temporary and traveling exhibits, and more. For additional information, visit www.crimemuseum.org or follow the museum on Facebook and Twitter.

A former specialist with the U.S. Army pleaded guilty to accepting a bribe from an Afghan truck driver at Forward Operating Base Gardez, Afghanistan (FOB Gardez), in exchange for allowing the driver to take thousands of gallons of fuel from the base for resale on the black market.  Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Michael J. Moore of the Middle District of Georgia made the announcement.

Anthony Don Tran, 28, of Stockton, California, pleaded guilty before U.S. District Court Judge Beth L. Freeman of the Northern District of California to one count of bribery of a public official.

According to admissions made in conjunction with his guilty plea, in exchange for $20,000 in cash, Tran permitted a local Afghan fuel truck to depart FOB Gardez without downloading roughly 12,000 gallons of fuel purchased by the U.S. government and designated for the base.  Tran admitted that, on May 21, 2013, after returning from deployment, he purchased a 2010 Dodge Challenger with the cash derived from the bribe.

In addition, Tran admitted to accepting at least $1,000 in cash from two other members of his unit, U.S. Army sergeants James Edward Norris and Seneca Hampton, in exchange for Tran agreeing not to report them for also taking bribes for fuel.  Both Norris and Hampton previously pleaded guilty to their roles in the scheme.  On May 21, 2015, Norris was sentenced to serve 51 months in prison.  Hampton is scheduled to be sentenced on July 28, 2015.

Pursuant to his plea agreement, Tran agreed to forfeit the proceeds he received from the bribery scheme as well as to pay full restitution.  Sentencing has been scheduled for Sept. 22, 2015.

The case is being investigated by the U.S. Army Criminal Investigation Command, the Office of the Special Inspector General for Afghanistan Reconstruction, the Defense Criminal Investigative Service and the Defense Contract Audit Agency, Investigative Support Division.  The case is being prosecuted by Trial Attorneys John Keller and Sean Mulryne of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorneys Michael Solis and Danial Bennett of the Middle District of Georgia. 

Operator of Psychiatric Facility Sentenced to 20 Years in Prison, and Owner of Group Home Sentenced to 12 Years in Prison

The former president of a Houston hospital, his son and a co-conspirator were sentenced today to 45 years, 20 years and 12 years in prison, respectively, for their roles in a $158 million Medicare fraud scheme. 

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Kenneth Magidson of the Southern District of Texas, Special Agent in Charge Perrye K. Turner of the FBI’s Houston Field Office, Special Agent in Charge Lucy R. Cruz of the Internal Revenue Service Criminal Investigation’s (IRS-CI) Houston Field Office, the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU), Special Agent in Charge Mike Fields of the U.S. Department of Health & Human Services-Office of the Inspector General (HHS-OIG) Dallas Regional Office, Special Agent in Charge Joseph J. Del Favero of the Railroad Retirement Board-Office of Inspector General (RRB-OIG) and Inspector General Patrick E. McFarland of the Office of Personnel Management-Office of Inspector General (OPM-OIG) made the announcement.

“The former President of Houston's Riverside hospital, his son and their co-conspirators saw mentally ill, elderly and disabled Medicare beneficiaries as commodities to be turned into profit centers – not as vulnerable individuals in need of health care,” said Assistant Attorney General Caldwell.  “Rather than providing needed medical care to a historically underserved community, the defendants ran a longstanding hospital into the ground through their greed and fraud.  According to the evidence presented at trial, the defendants had patients sit around the facility watching movies while they received no treatment.  Meanwhile, the defendants billed Medicare more than $158 million for care that was never provided.  This brazen fraud cannot and will not be tolerated.”

Earnest Gibson III, 70, the former president of Riverside General Hospital, Earnest Gibson IV, 37, the operator of Devotions Care Solutions, a satellite psychiatric facility of Riverside General Hospital, and Regina Askew, 50, the owner of Safe and Sound group home, were sentenced by U.S. District Judge Lee H. Rosenthal of the Southern District of Texas.  In addition to the significant terms of imprisonment, Earnest Gibson III was ordered to pay restitution in the amount of $46,753,180, Earnest Gibson IV was ordered to pay restitution in the amount of $7,518,480, and Regina Askew was ordered to pay restitution in the amount of $46,255,893.

Following a five-week jury trial, on Oct. 20, 2014, Earnest Gibson III, Earnest Gibson IV and Regina Askew each were convicted of conspiracy to commit health care fraud, conspiracy to pay and receive kickbacks, as well as related counts of paying or receiving illegal kickbacks.  Earnest Gibson III and Earnest Gibson IV also were convicted of conspiracy to commit money laundering.  Co-defendant Robert Crane, a patient recruiter, also was convicted of conspiracy to pay and receive kickbacks, and is scheduled to be sentenced on Dec. 9, 2015.

According to evidence presented at trial, from 2005 until June 2012, the defendants and others engaged in a scheme to defraud Medicare by submitting to Medicare, through Riverside and its satellite locations, approximately $158 million in false and fraudulent claims for partial hospitalization program (PHP) services.  A PHP is a form of intensive outpatient treatment for severe mental illness.

Specifically, evidence at trial demonstrated that the Medicare beneficiaries for whom the hospital billed Medicare did not qualify for or need PHP services.  Moreover, the evidence showed that Medicare beneficiaries rarely saw a psychiatrist and did not receive intensive psychiatric treatment.  In fact, some of the beneficiaries were suffering from Alzheimer’s and could not actively participate in the treatment for which Medicare was billed.

Evidence presented at trial also showed that Earnest Gibson III paid kickbacks to patient recruiters and to owners and operators of group care homes, including Regina Askew, in exchange for which those individuals delivered ineligible Medicare beneficiaries to the hospital’s PHPs.  Earnest Gibson IV also paid patient recruiters, including Robert Crane and others, to deliver ineligible Medicare beneficiaries to the specific PHP operated by Earnest Gibson IV.

To date, six other individuals either have pleaded guilty based on their involvement in the scheme.  Mohammad Khan, an assistant administrator at Riverside, who managed many of the hospital’s PHPs, pleaded guilty to conspiracy to commit health care fraud, conspiracy to defraud the United States and to pay illegal kickbacks, and five counts of paying illegal kickbacks; on May 21, 2015, Mohammad Khan was sentenced by U.S. District Judge Sim Lake of the Southern District of Texas to 40 years in prison for his role in the scheme.  William Bullock, an operator of a Riverside satellite location, as well as Leslie Clark, Robert Ferguson, Waddie McDuffie and Sharonda Holmes, who were involved in paying or receiving kickbacks, also have pleaded guilty to participating in the scheme and await sentencing.

The case was investigated by the FBI, IRS-CI, Texas MFCU, HHS-OIG, RRB-OIG and OPM-OIG.  The case was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Southern District of Texas.  The case is being prosecuted by Assistant Chiefs Laura M.K. Cordova and Jennifer L. Saulino and Trial Attorney Ashlee C. McFarlane of the Criminal Division’s Fraud Section.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,100 defendants who collectively have billed the Medicare program for more than $6.5 billion.  In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

To learn more about the Health Care Fraud Prevention and Enforcement Team (HEAT), go to: www.stopmedicarefraud.gov.

A Portland, Oregon, woman pleaded guilty on Friday before U.S. District Court Judge Robert E. Jones in the District of Oregon for conspiring to file fraudulent federal income tax returns that claimed refunds of more than $1 million, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.

According to the plea agreement, Jasmine Mason admitted that she conspired with other individuals to prepare and file more than 227 fraudulent income tax returns for calendar year 2009 during the 2010 tax filing season.  The false information on the tax returns included fictitious W-2 wage and withholding information and fraudulent refundable tax credits. 

As part of the terms of the plea agreement, Mason has agreed to a sentencing recommendation of 32 months in prison for her crimes.  She also faces financial penalties of fines and restitution to the Internal Revenue Service (IRS) of more than $330,000 at her Sept. 15 sentencing. 

Acting Assistant Attorney General Ciraolo commended the special agents of IRS-Criminal Investigation in Portland, who investigated the case, and Trial Attorneys Lori Hendrickson and Ryan Raybould of the Tax Division, who are prosecuting the case.  She also thanked the U.S. Attorney’s Office in Portland for their substantial assistance. 

Additional information about the Tax Division and its enforcement efforts may be found on the division’s website. 

A Wichita, Kansas, man pleaded guilty to attempting to explode a car bomb at the airport in Wichita, announced Assistant Attorney General for National Security John P. Carlin and U.S. Attorney Barry R. Grissom of the District of Kansas.

Terry Lee Loewen, 59, of Wichita, pleaded guilty today to one count of attempting to use a weapon of mass destruction.  Loewen was arrested in December 2013 when he tried to enter the grounds of the Wichita Mid-Continent Airport for the purpose of exploding a bomb.  (The airport recently was renamed Wichita Dwight D. Eisenhower National Airport).

“Terry Loewen utilized his privileged airport access to attempt a terrorist attack in Wichita,” said Assistant Attorney General Carlin.  “Detecting, disrupting and holding accountable those who wish to harm Americans remains our highest priority.”

“Protecting the American people from terrorism is our primary mission,” said U.S. Attorney Grissom.  “It is vital that we disrupt attacks against our homeland and bring terrorists to justice.”

In his plea, Loewen admitted he came to the attention of the FBI late in May 2013 when he became a Facebook friend of a person who was posting comments advocating violent jihad.  The FBI began communicating with Loewen through an undercover employee.  After Loewen expressed his desire to engage in violent jihad, the undercover employee offered to introduce him to someone who could help him do it.

Loewen told the undercover employee he was waiting for what he called “the green light” from Allah to carry out a violent attack on a civilian target.  He said he did not expect to live through any of the attacks he had in mind.  He also said he was inspired by the teachings of Osama bin Laden and Anwar al-Awlaki, and that he had downloaded thousands of pages of information on jihad.

In September 2013, Loewen sent photos of airplanes on the tarmac at the Wichita airport.  He commented that he could have “walked over there, shot both pilots … slapped some C4 on both fuel trucks and set them off before anyone even called TSA.”

In October 2013, Loewen met with a second undercover FBI employee who Loewen believed was a “brother” and would help him blow up a plane.  Loewen said he had scouted the airport to determine a time and place for an attack that would be sure to kill as many people as possible.

Loewen assisted the second FBI employee in the final assembly of an improvised explosive device.  He was not aware that the explosive materials used in the device were inert.  In the early hours of Dec. 13, 2013, the second FBI employee picked up Loewen at a Wichita hotel.  They drove to where the bomb was stored and finished wiring the device.  When they reached the airport, Loewen twice used his airport badge at a card reader to attempt to get onto the tarmac before he was arrested.

Loewen’s sentencing will be scheduled at a later date.  Both parties have agreed to recommend a sentence of 20 years in federal prison.

Assistant Attorney General Carlin and U.S. Attorney Grissom commended the FBI Wichita Joint Terrorism Task Force, which includes members from the FBI, Sedgwick County, Kansas, Sheriff’s Office and Kansas Highway Patrol.  Assisting with the investigation were the FBI Kansas City Division, the Transportation Security Administration, the Wichita Airport Authority and the Wichita Police Department.  Assistant Attorney General Carlin and U.S. Attorney Grissom also commended the prosecutors on the case, Assistant U.S. Attorneys David Smith and Tony Mattivi of the District of Kansas and Trial Attorney Erin Creegan of the Justice Department’s National Security Division.

Loewen Plea Agreement

A federal court has barred a Tampa, Florida, man from preparing federal tax returns for others, the Justice Department announced today.

The civil injunction order, to which Octavio Cruz consented, was signed by U.S. District Judge Elizabeth A. Kovachevich of the Middle District of Florida.  The order also bars the business Cruz was operating, Advantage Accounting Corp., from continuing to prepare tax returns.

In August 2014, the United States filed a complaint to enjoin Cruz and Advantage Accounting Corp. from preparing returns for others.  According to the complaint, Cruz prepared returns that unlawfully understated income tax liabilities and overstated refunds by fabricating or exaggerating deductions and tax credits his customers were not eligible to take.  Cruz’s practices included fabricating Schedule C (Profit or Loss From Business) losses for non-existent businesses and falsely claiming child care and residential energy credits for which the customers were not eligible and did not incur.  The suit alleges that Cruz also prepared returns that falsely claimed American Opportunity Credits for taxpayers who did not incur qualified education expenses or go to college.  Altogether, the government alleged that loss to the U.S. Treasury from Cruz’s activities may be in the millions of dollars. 

The injunction requires Cruz to provide the government with a list of all customers for whom he has prepared federal tax returns or claims for refund since Jan. 1, 2012.

Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2015.  The IRS has some tips on its website for choosing a tax preparer, and has launched a free directory of federal tax preparers.  In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers and tax scheme promoters.  Information about these cases is available on the Justice Department’s website.  An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on here.  If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.

The United States filed today a proposed consent decree that will resolve claims of federal, state and tribal resource trustees for natural resource damages (NRD) caused by the 2010 rupture of Enbridge’s Line 6B pipeline in Michigan that resulted in one of the largest inland oil spills in U.S. history.  Under the proposed settlement, several Enbridge affiliates will be responsible for completing numerous natural resource restoration projects along the Kalamazoo River and will pay an additional sum of nearly $4 million to fund additional restoration projects, reimburse natural resource damage assessment costs of federal and tribal trustees and support ongoing restoration planning activities of natural resource trustees.

“This settlement will restore natural resources affected by the 2010 spill – one of the largest inland spills in our history – and compensates the public for natural resource losses resulting from the spill,” said Assistant Attorney General John C. Cruden for the Department of Justice’s Environment and Natural Resources Division.  “By requiring restoration and monitoring, along with funding for the federal, state and tribal trustees, this settlement will go a long way toward correcting the injuries to injured natural resources along the Kalamazoo River.”

Trustees reached the NRD settlement in conjunction with a separate settlement that resolves related state law claims of the state of Michigan against Enbridge relating to the July 2010 spill.  The state settlement was filed May 12 in the circuit court for Calhoun County, Michigan.  The NRD settlement, which was filed in federal court today, provides funding to the federal, state and tribal trustees to conduct natural resource restoration, reimburses assessment costs spent by the federal and tribal trustees and incorporates requirements from the state settlement for Enbridge to conduct restoration and monitoring.  More details on the NRD settlement can be found at www.fws.gov/midwest/es/ec/nrda/MichiganEnbridge/.

The state settlement provisions that will also be enforceable under the NRD settlement include commitments by Enbridge to perform work to restore or compensate for injuries to injured natural resources along the Kalamazoo River, at an estimated cost of at least $58 million.  Thus, the two settlements combined result in estimated expenditures of at least $62 million to resolve natural resource damages.  In addition, the state settlement required Enbridge to implement a number of measures pursuant to state response action authorities and to pay the state for its costs of oversight of cleanup and restoration.  The state of Michigan settlement announcement and details can be found at www.michigan.gov/oilspill.

The NRD settlement addresses Enbridge’s liability for natural resource damages under the Oil Pollution Act (OPA) and Michigan’s Natural Resources and Environmental Protection Act.  The NRD settlement provides for habitat improvement projects to address injuries to aquatic organisms, fish, reptile, mammals and birds, as well as for enhancements to public access and use of the Kalamazoo River for recreational, educational and cultural purposes.  The trustees are proposing to implement the following projects with funding from the NRD settlement: 

• Replace undersized culverts, remove existing obstacles to water flow and increase floodplain capacity in two tributaries to the Kalamazoo River;

• Control Eurasian water milfoil and otherinvasive species, within the Fort Custer State Recreation Area to provide improved habitat for warm water fisheries;

• Restore 175 acres of oak savanna uplands in Fort Custer State Recreation Area;

• Track and protect turtle reproduction in the impacted area of the Kalamazoo River;

• Restore wild rice beds in suitable areas along the Kalamazoo River;

• Document the historic use and knowledge of natural resources by members of the Match-E-Be-Nash-She-Wish Band of the Pottawatomi Indians (Gun Lake Tribe) and the Nottawaseppi Huron Band of the Potawatomi to guide restoration and stewardship.

The NRD settlement also incorporates certain requirements from the state’s settlement with Enbridge, including requirements to:                                                       

• Restore and monitor the 320 acres of wetlands affected by the spill and response activities;

• Permanently restore, create or otherwise protect at least 300 additional acres of wetland habitat in compensation for wetland losses;

• Evaluate stream function within the restored areas of Talmadge Creek and perform additional actions as needed;

• Conduct monitoring and restoration activities related to the removal of large woody debris during the spill response;

• Fund the state of Michigan to monitor fish contamination, fish populations and the health of stream bottom communities along Talmadge Creek and the Kalamazoo River.

  Enbridge has already implemented additional projects that relate to losses of natural resources:

• Created the Kalamazoo River Community Recreational Foundation including a $2.5 million endowment to assure perpetual care of these projects

Removed the dam at Ceresco on the Kalamazoo River and restored over 2.5 miles of river channel that was previously impounded.

“Working together, the natural resource trustees are using the settlements in tandem to develop a big-picture, comprehensive plan to restore natural resources,” said Deputy Regional Director Charlie Wooley for the Midwest Region of the U.S. Fish and Wildlife Service.  “This cooperative approach will enhance our ability to return to the public the natural resources lost due to the spill.”

The trustees are asking for public comment on a draft Damage Assessment and Restoration Plan/Environmental Assessment (DARP/EA) developed to inform the public about the harm caused by the pipeline rupture and the proposed restoration projects described above to address these injuries and losses.  This draft DARP/EA is now available for public review and comment at www.fws.gov/midwest/es/ec/nrda/MichiganEnbridge/, along with the consent decree for the NRD settlement filed in federal court at www.justice.gov/enrd/consent-decrees.

Settlement of the state law claims and the natural resource damages claims do not affect or alter Enbridge’s other liabilities or obligations under OPA or the Clean Water Act (CWA). 

Enbridge’s Lakehead Line 6B pipeline ruptured near Marshall, Michigan, on July 25, 2010, discharging oil into the environment.  Enbridge discharged significant additional oil from Line 6B during two attempts to restart the ruptured pipeline on July 26, 2010.  Oil discharged from Line 6B entered Talmadge Creek and ultimately extended approximately 38 miles down the Kalamazoo River.  The oil impacted over 1,560 acres of stream and river habitat as well as floodplain and upland areas, injuring birds, mammals, reptiles and other wildlife.  The river was immediately closed to the public and sections remained closed for several years, reducing recreational and tribal uses of the river. 

For more information on the cleanup of the 2010 pipeline discharges, visit www.mi.gov/oilspill and www.epa.gov/enbridgespill.

The natural resource trustees in this case include the Michigan Department of Environmental Quality, the Michigan Department of Natural Resources, the Michigan Department of the Attorney General, the U.S. Fish and Wildlife Service, the National Oceanic and Atmospheric Administration, the Nottawaseppi Huron Band of the Potawatomi Tribe and the Match-E-Be-Nash-She-Wish Band of the Pottawatomi Indians (Gun Lake Tribe). 

The owner of a Bardonia, New York, construction service company pleaded guilty to conspiring to defraud the New York Power Authority (NYPA) and filing a false tax return, the Department of Justice, the IRS and the New York State Inspector General announced today.

According to the two-count felony charge filed in U.S. District Court of the Southern District of New York in White Plains today, Thomas Delaney, owner of Over Rock Construction LLC, participated in a scheme to defraud NYPA.  In October 2009, Over Rock was awarded a five-year, $3 million contract to perform landscaping, snow removal and masonry work at NYPA’s administrative facility in White Plains.  To generate cash for those involved in the scheme, Delaney, with the assistance of his co-conspirators, submitted fraudulent certified payroll statements and invoices to NYPA for reimbursement for individuals who performed no services (“no show” employees) on behalf of Over Rock at NYPA.  Between 2009 and 2012, the false and fraudulent overcharges paid by NYPA to Over Rock totaled more than $400,000.  Delaney also pleaded guilty to filing a false and fraudulent tax return which substantially understated his income. 

“The defendant cooked the books twice – first so he could defraud the New York Power Authority and then again to avoid paying taxes he owed,” said Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division.  “The division will continue to work with our partners at the FBI, IRS and the New York Inspector General to bring to justice those who corrupt a public bidding process for their own personal gain.” ‎  

“Today we see yet another scheme involving fraudulent payroll statements and invoices that were used to pad the pockets of devious individuals,” said Assistant Director in Charge Diego Rodriguez of the FBI’s New York Field Office.  “Along with the announcement of this guilty plea comes a reminder that the FBI will continue to work with our partners in rooting out fraud to both public and private companies.”

“This contractor defrauded the State on multiple occasions, repeatedly billing the New York Power Authority for workers who never showed up and by paying significantly less taxes than he owed,” said New York State Inspector General Catherine Leahy Scott.  “Today's guilty plea serves to reinforce my office's ongoing commitment to protect the integrity of the contracting process across all state agencies and authorities.  I would like to thank our federal law enforcement partners in this matter and look forward to continuing our work with them to hold accountable any corrupt entities or individuals.”

“IRS Criminal Investigation is committed to ensuring that everyone pays their fair share of taxes,” said Special Agent in Charge Shantelle P. Kitchen of the IRS Criminal Investigation New York Field Office.  “To that end, we will investigate individuals who willfully conceal income to reduce or eliminate their own tax obligations, effectively increasing the burden on honest taxpayers.”       

Delaney pleaded guilty to a fraud conspiracy charge that carries a maximum penalty of 20 years in prison, three years of supervised release and a $250,000 fine.  Delaney also pleaded guilty to subscribing to a false tax return, which carries a maximum penalty of three years in prison and a $100,000 fine.  The maximum fines for each of these charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

These charges arose from an investigation initiated by the New York State Inspector General and is part of an ongoing joint federal and state investigation of bid rigging, fraud and tax-related offenses in the award of contracts at NYPA’s facility in White Plains.  The investigation is being conducted by the Antitrust Division’s New York Office with the assistance of the FBI, the IRS Criminal Investigation and the New York State Office of the Inspector General.  NYPA is cooperating with the investigation.  Anyone with information on bid rigging or other anticompetitive conducted related to the award or performance of municipal and state contracts should contact the Antitrust Division’s Citizen Complaint Center at 888-647-3258 or visit http://www.justice.gov/atr/contact/newcase.html.

Michael Todd Wolfe aka Faruq, 24, of Austin, Texas, was sentenced this afternoon by U.S. District Court Judge Sam Sparks of the Western District of Texas to serve 82 months in federal prison for attempting to provide material support to a designated foreign terrorist organization, announced Assistant Attorney General for National Security John Carlin, Acting U.S. Attorney Richard L. Durbin Jr. for the Western District of Texas and Special Agent in Charge Christopher Combs of the FBI’s San Antonio Division.

In June 2014, Wolfe pleaded guilty to the charge, admitting that from August 2013 to June 17, 2014, he planned to travel to the Middle East to provide material support to the Islamic State of Iraq and the Levant (ISIL).  Wolfe previously acknowledged that he applied for and acquired a U.S. passport, participated in physical fitness training, practiced military maneuvers and made efforts to conceal his communications about his plans to travel overseas to engage in violent jihad.  Wolfe also purchased airline tickets so that he could travel to Europe to meet an FBI undercover employee, whom the defendant then believed would facilitate travel to Syria through Turkey.  In furtherance of his attempt to provide material support to ISIL, Wolfe travelled to Houston and was apprehended on June 17, 2014, on the jet-way, as he attempted to board a flight to Toronto, Canada.  His ticketed itinerary had him traveling through Iceland and arriving in Copenhagen, Denmark, on June 18, 2014.  He then planned to make his way to Syria to join with ISIL and engage in the armed conflict.  Wolfe has remained in federal custody since his arrest.

The case was investigated by the agencies comprising the Central Texas JTTF, which include the FBI; Internal Revenue Service-Criminal Investigation; U.S. Citizenship and Immigration Services; U.S. Army Intelligence; Austin Police Department; Round Rock, Texas, Police Department; Killeen, Texas, Police Department; University of Texas Police Department; Travis County, Texas Sheriff's Office; Texas Department of Public Safety, Office of the Texas Attorney General and the Texas Alcoholic Beverage Commission. 

The case was prosecuted by Assistant U.S. Attorneys Gregg N. Sofer and Michael Galdo of the Western District of Texas, and Trial Attorneys Josh Parecki and Michael Dittoe of the National Security Division’s Counterterrorism Section.

A Dix Hills, New York, resident and business owner was sentenced to serve more than one year in prison today in the Eastern District of New York for employment tax fraud, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.

“Business owners that use ‘off the books’ payrolls cheat the U.S. Treasury and take unfair advantage of honest competitors who follow the law and pay their taxes,” said Acting Assistant Attorney General Ciraolo.  “Today’s sentence sends a clear message that the Justice Department is aggressively pursuing and holding accountable those who willfully fail to collect and pay employee withholdings, social security and other required federal employment taxes.”

Eric Anderson was sentenced to serve 18 months in prison by U.S. District Judge Arthur D. Spatt.  In addition to prison time, Anderson was ordered to serve three years of supervised release and to pay $1,080,222 in restitution to the Internal Revenue Service (IRS).  Anderson paid $50,000 towards restitution at his sentencing today.

According to court documents, Anderson owned three construction companies located in Dix Hills: Anderson Framing, Anderson Enterprise and Anderson Trim Specialty.  From 2006 through 2008, the defendant used a commercial check cashing service to cash more than $10.5 million in checks paid to his construction companies representing gross receipts of the businesses.  Anderson used a portion of the cash to pay his employees “under the table” wages.  As the owner, Anderson was responsible for his companies’ finances and tax obligations.  From 2006 through 2008, Anderson failed to collect or pay over to the IRS the employment taxes that were due quarterly on his employees’ cash wages. 

Anderson also used a portion of the cash from his businesses for his own personal use.  He concealed much of his income from the IRS by filing false corporate and individual federal income tax returns in certain years and failing to file tax returns in other years. In total, Anderson’s actions caused a tax loss of more than $1 million to the IRS. 

On June 9, 2014, Anderson pleaded guilty to willfully failing to collect and pay over to the IRS employment taxes. 

Acting Assistant Attorney General Ciraolo commended special agents of IRS-Criminal Investigation, who investigated the case, and Trial Attorneys Mark Kotila and Jeffrey Bender of the Tax Division, who prosecuted the case.  She also thanked the U.S. Attorney’s Office of the Eastern District of New York for their assistance.

Additional information about the Tax Division and its enforcement efforts may be found on the division’s website. 

WASHINGTON — Twenty-seven criminal foreign fugitives with active Interpol alerts were arrested across the United States this week by U.S. Immigration and Customs Enforcement’s (ICE) Enforcement and Removal Operations (ERO) and the U.S. Marshals Service (USMS).

Those arrested are from 13 different countries and wanted for crimes abroad. Of the 27, five are wanted for homicide, two for kidnapping, one for raping a child and one for human sex trafficking.

“Criminals who create mayhem here in the United States or abroad should understand that law enforcement is a global partnership,” said ICE Director Sarah R. Saldaña. “We will find them, and we will bring them to justice.”

Arrests occurred nationwide in nine states during the three-day sweep, which took place Tuesday through Thursday. Those arrested fell squarely into the agency’s enforcement priorities, which ICE officers prioritize and enforce every day.

“The arrest of these foreign fugitives should send a strong message to anyone attempting to avoid prosecution for their crimes here in the U.S. or abroad,” said USMS Director Stacia Hylton. “Our men and women were relentless in their effort to locate and apprehend these criminals.  We hope our effort gives victims a sense of comfort in knowing these individuals are no longer on the streets.”

“Information-sharing 24 hours, seven days a week, 365 days a year among U.S. law enforcement agencies like ERO and the USMS, along with the 189 other Interpol member countries and Interpol Washington, ensures transnational criminals have no place to hide,” stated Interpol Washington Director Shawn A. Bray. “By facilitating the sharing of this information with our law enforcement partners, together, we will continue to enhance safety and security for U.S. citizens and the global community.”

Arrests included:

• On June 2, ERO arrested Nelson Garcia Orellana, 30, and his brother Jorge Garcia Rivera, 23, both natives of El Salvador, in Trenton, New Jersey, and Alexandria, Virginia, respectively. They are wanted by authorities in their home country for kidnapping and are the subjects of Interpol Red Notices.

 

• On June 2, ERO arrested Gabriel Collado Gonzalez, 40, a native of Nicaragua, in Miami. Gonzalez is wanted by authorities in his home country for embezzlement and criminal conspiracy and is the subject of an Interpol Red Notice.

 

• On June 2, ERO arrested Raul Ortiz Henriquez, 40, a native of El Salvador, in Santa Fe Springs, California. Henriquez is wanted by authorities in his home country for rape of a minor. In November 2013, Henriquez grabbed his victim by her arms and forced her into a van he was driving while she was leaving school. He drove away, parked, beat her in the chest and raped her. He is the subject of an Interpol Red Notice.

The following individuals are all the subject of Interpol Red Notices and remain at-large:

• Juan Chicas Ramos, 56, a native of El Salvador, is wanted by authorities in his home country on an Interpol Red Notice for homicide

 

• Lisandro Medina Gamez, 33, a native of El Salvador, is wanted by authorities in his home country on an Interpol Red Notice for fraud

The ICE National Criminal Analysis and Targeting Center (NCATC) provided critical investigative support for this operation, including criminal and intelligence analysis from a variety of sources. The NCATC provides comprehensive analytical support to aid the at-large enforcement efforts of all ICE components.

ICE credits the combined efforts of the U.S. National Central Bureau-Interpol Washington, the U.S. Marshals Service, the U.S. Department of State Diplomatic Security Service, U.S. Citizenship and Immigration Services, and U.S. Customs and Border Protection.

Members of the public who have information about these fugitives are urged to contact ICE by calling the toll-free ICE tip line at 1-866-347-2423 or internationally at 001-1802-872-6199. They can also file a tip online by completing ICE’s online tip form.

Since Oct. 1, 2009, ERO has removed more than 720 foreign fugitives from the United States who were sought in their native countries for serious crimes, including kidnapping, rape and murder. ERO works with HSI’s Office of International Operations, foreign consular offices in the United States, and Interpol to identify foreign fugitives illegally present in the United States.

A Georgia real estate investor pleaded guilty today for his role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Georgia, the Department of Justice announced.

Felony charges against David Wedean were filed on April 27, 2015, in the U.S. District Court of the Northern District of Georgia in Atlanta.  According to court documents, from at least as early March 2007 and continuing at least until August 2011, in Fulton County, Georgia, and from at least as early as August 2007 and continuing at least until September 2011, in DeKalb County, Georgia, Wedean conspired with others not to bid against one another, but instead designated a winning bidder to obtain selected properties at public real estate foreclosure auctions in Fulton and DeKalb Counties.  Wedean was also charged with a conspiracy to use the mail to carry out a scheme to fraudulently acquire title to selected Fulton and DeKalb properties sold at public auctions, to make and receive payoffs and to divert money to co-conspirators that would have gone to mortgage holders and others by holding second, private auctions open only to members of the conspiracy.  The department said that the selected properties were then awarded to the conspirators who submitted the highest bids in the second, private auctions.

“The defendant conspired with other real estate investors to profit by defrauding mortgage holders and property owners,” said Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division.  “This case, which is the eighth prosecution so far against defendants for rigging public foreclosure auctions in Georgia, demonstrates the Division’s continuing commitment to rooting out corruption and fraud in real estate markets around the country.” 

The primary purpose of the conspiracies was to suppress and restrain competition and to conceal payoffs in order to obtain selected real estate offered at Fulton and DeKalb County public foreclosure auctions at non-competitive prices.  When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner.  According to court documents, these conspirators paid and received money that otherwise would have gone to pay off the mortgage and other holders of debt secured by the properties, and, in some cases, the defaulting homeowner.

“The FBI, in working with the U.S. Department of Justice’s Antitrust Division, continues to address the unlawful bid rigging seen in Georgia’s real estate foreclosure auctions,” said Special Agent in Charge J. Britt Johnson of the FBI’s Atlanta Field Office.  “The guilty plea of Mr. Wedean, a Georgia based real estate investor, not only illustrates the problem but also how the federal government will aggressively pursue those engaged in this criminal activity.”

A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals.  The maximum fine for a Sherman Act charge may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime if either amount is greater than the statutory maximum fine.  A count of conspiracy to commit mail fraud carries a maximum penalty of 20 years in prison and a fine in an amount equal to the greatest of $250,000, twice the gross gain the conspirators derived from the crime or twice the gross loss caused to the victims of the crime by the conspirators.

Including Wedean, eight cases have been filed as a result of the ongoing investigation being conducted by Antitrust Division’s Washington Criminal II Section, the FBI’s Atlanta Division and the U.S. Attorney’s Office of the Northern District of Georgia.  Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions in Georgia should contact Washington Criminal II Section of the Antitrust Division at 202-598-4000, call the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258 or visit www.justice.gov/atr/contact/newcase.htm.

The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force.  The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations.  Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants.  For more information on the task force, please visit www.StopFraud.gov.

A federal court has barred a North Las Vegas, Nevada, woman and her business from preparing federal tax returns that contain or involve foreign earned income and from promoting the exclusion of foreign earned income to others, the Justice Department announced today.

The civil injunction order, to which Sheila Bunting consented, was entered by U.S. District Judge James C. Mahan of the District of Nevada.  The injunction also bars Bunting’s business, 5 Star Tax LLC, from continuing to prepare tax returns that contain or involve foreign earned income, and from promoting the exclusion of foreign earned income to others.

According to the complaint, Bunting inappropriately attempted to exclude foreign earned income from the calculation of her customers’ federal tax liabilities, which understated her customers’ correct tax liabilities or inflated improper refunds.  Typically, U.S. citizens may exempt some foreign earned income from the calculation of gross income if they are present in a foreign country for at least 330 full days out of 12 consecutive months.  This period can be waived when the Secretary of the Treasury determines, after consultation with the Secretary of State, that individuals were required to leave a foreign country due to war, civil unrest or other conditions that preclude the normal conduct of business, among other things.  In implementing this waiver provision, each year the Secretary of the Treasury publishes a list of countries that have been determined eligible for waiver requests.  According to the suit, Bunting disregarded the published list of waiver-eligible countries in filing the exclusion of foreign earned income on behalf of her customers. 

The injunction requires Bunting to provide a list of customers that identifies by name, social security number, address, e-mail address, telephone number and tax periods, all persons for whom she has prepared federal tax returns or claims for refund since Jan. 1, 2012, that reference foreign earned income.

Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2015.  The IRS has some tips on its website for choosing a tax preparer, and has launched a free directory of federal tax preparers.  In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers and tax scheme promoters.  Information about these cases is available on the Justice Department’s website.  An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on here.  If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.

The Department of Justice announced today that the United States has settled a False Claims Act lawsuit with Health Management Associates (HMA) and Clearview Regional Medical Center for $595,155.  The lawsuit filed in the Middle District of Georgia alleged that from 2008 to 2009 the hospital paid kickbacks to an obstetric clinic that served primarily undocumented Hispanic women, in return for referral of those patients for labor and delivery at the hospital.  The hospital then billed the Medicaid program in Georgia for the services provided to the referred patients.  Clearview, located in Monroe, Georgia, was named Walton Regional Medical Center and was owned by hospital operator HMA during the time period relevant to the lawsuit.  Clearview is now owned by Community Health Systems (CHS), which purchased HMA in January 2014. 

"This resolution illustrates our commitment to ensuring that health care providers who pay kickbacks in return for patient referrals are held accountable,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division.  “Schemes such as this one corrupt the health care system and take advantage of vulnerable patients.”

“The Medicaid program is a vital part of the government’s efforts to make sure that everyone has access to health care,” said U.S. Attorney Georgia Michael J. Moore of the Middle District of Georgia.  “Instead of providing health care services to expectant mothers in its area and receiving payment for those services from Medicaid, the hospital participated in a scheme to pay kickbacks in exchange for having pregnant women from outside its market funneled to its facility with the goal of increasing the amount of Medicaid money the hospital could claim.”

The United States’ complaint alleges that HMA’s Walton Regional Medical Center paid kickbacks to Hispanic Medical Management doing business as Clinica de la Mama (Clinica) and related entities, in return for Clinica’s agreement to send pregnant women to Walton Regional for deliveries paid for by Medicaid, in violation of the federal Anti-Kickback Statute.  The kickbacks were disguised as payments for a variety of services allegedly provided by Clinica.

The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid and other federally funded programs.  The Anti-Kickback Statute is intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives and is instead based on the best interests of the patient. 

“Hospitals that pay kickbacks to clinics for referrals of undocumented pregnant patients are taking advantage of both these vulnerable women and the taxpayer-funded Medicaid program,” said Special Agent in Charge Derrick L. Jackson of the U.S. Department of Health and Human Services, Office of Inspector General’s (HHS-OIG) Atlanta Regional Office.  “Our agency is dedicated to investigating such corrosive kickback schemes, which undermine the public’s trust in medical institutions and the financial health of government health care programs.”

“The FBI is proud of the role it played in bringing forward today’s settlement, said Special Agent in Charge J. Britt Johnson of the FBI Atlanta Field Office.  “The FBI will continue to provide significant investigative assets and resources to ensure that the integrity of federally funded health care programs such as Medicaid are protected from providers who would abuse them.”

As part of the settlement, HMA and Clearview will pay the State of Georgia an additional $396,770 to settle Georgia’s claims under the Georgia False Medicaid Claims Act.  The Medicaid program is a jointly funded federal-state program that provides health care to the poor and disabled.  Although undocumented aliens are not eligible for regular Medicaid coverage, the Medicaid program provides coverage for emergency conditions, including childbirth, for undocumented aliens.

The lawsuit was filed under the qui tam, or whistleblower, provisions of the False Claims Act.  The Act permits private parties to sue on behalf of the government for false claims for government funds and to receive a share of any recovery.  The False Claims Act also permits the government to intervene in such lawsuits, as it did in this case against Walton Regional, as well as several other defendants, including Clinica de la Mama and four hospitals owned by Tenet Healthcare Corporation.  The litigation against the non-settling defendants is ongoing.  The relator, Ralph D. Williams, the chief financial officer of Walton Regional from April 2009 to October 2009, will receive $119,031 from the United States’ portion of the settlement. 

This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $24 billion through False Claims Act cases, with more than $15.3 billion of that amount recovered in cases involving fraud against federal health care programs.

This matter was investigated by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Offices for the Middle and Northern Districts of Georgia, HHS-OIG, FBI and the Office of the Attorney General for the State of Georgia.

The case is captioned United States ex rel. Williams v. Health Mgmt. Assocs. Inc., et al., No. 3:09-CV-130 (M.D. Ga.).

The claims resolved by this settlement are allegations only and there has been no determination of liability.

SACRAMENTO, Calif. – Ivan Espinoza Villafana, de 25 años de edad y ciudadano de México, fue sentenciado hoy por el Juez del Distrito de los Estados Unidos Troy L. Nunley a cinco años de prisión y una indemnización de $14,000 dólares por la posesión de una arma de fuego por un indocumentado, el cultivo de marihuana y la depredación de terrenos y recursos públicos, anunció el Procurador de los Estados Unidos Benjamín B. Wagner.

Según documentos del tribunal, el 19 de agosto del 2014, agentes de la policía adentraron en un campo de cultivo de marihuana por los alrededores de Ice Springs dentro del Bosque Nacional de Mendocino en el Condado de Glenn donde se estaban cultivando 732 plantas de marihuana. Al ver que se acercaban los agentes Villafana huyó. Fue aprehendido y arrestado en el lugar de los hechos. En el momento de la detención, Villafranca llevaba un revólver Smith & Wesson cargado en la pretina de su pantalón. Los agentes también encontraron un rifle en el área de recreación del lugar. Villafana está bajo custodia desde su arresto.

El cultivo de marihuana en el lugar causó daños significativos a los recursos naturales. Se estaba  desviando agua por medio de tubos de riego desde un arroyo cercano hasta las plantas de marihuana que necesitan aproximadamente 6 a 8 galones de agua por planta cada día. Los agentes también observaron que había numerosos sacos de fertilizante y pesticidas que estaban siendo utilizados para cultivar la marihuana. Un hidrólogo del Servicio Forestal de EE. UU. hizo un reconocimiento del lugar y concluyó que el impacto de la fuga del fertilizante y los pesticidas hacia los arroyos perjudicaría la calidad del agua y causaría daños a la fauna ya que los animales del Bosque Nacional ingerirían los pesticidas y fertilizantes. Además, los cultivadores de la marihuana del lugar talaron y despejaron los árboles y la vegetación dentro del Bosque Nacional para hacer sitio para las plantas de marihuana. El reparar y el rehabilitar el daño causado al Bosque Nacional por este cultivo le costará a los Estados Unidos entre $14,400 y $73,500 dólares.

Este caso fue el producto de una investigación llevada a cabo por el Servicio Forestal de los Estados Unidos, la Oficina del Sheriff del Condado de Glenn y del Departamento de Pesca y Vida Silvestre de California. El Procurador Auxiliar de los Estados Unidos Christiaan Highsmith está procesando el caso.

Acting Assistant Attorney General Caroline D. Ciraolo of the Department of Justice’s Tax Division and U.S. Attorney Preet Bharara of the Southern District of New York announced that a Kentucky businessman was sentenced today to serve 12 years in prison.

Wilbur Anthony Huff, 53, of Caneyville and Louisville, Kentucky, was also ordered to pay more than $108 million in restitution for committing various tax crimes that caused more than $50 million in losses to the Internal Revenue Service (IRS), and a massive fraud that involved the bribery of bank officials, the fraudulent purchase of an insurance company, and the defrauding of insurance regulators and an investment bank.  In December 2014, Huff pleaded guilty before U.S. District Judge Noemi Reice Buchwald of the Southern District of New York, who imposed today’s sentence.

“The department is committed to vigorously pursuing and prosecuting those individuals who violate the employment tax laws of the United States,” said Acting Assistant Attorney General Ciraolo.  “Today’s significant prison sentence sends a loud and clear message to those engaged in such criminal conduct, including owners and operators of professional employer organizations like Mr. Huff, who steal employment taxes collected from their business clients to line their own pockets, instead of paying over those funds to the IRS.” 

“Anthony Huff and his co-conspirators stole millions of dollars from taxpayers and engaged in extensive frauds, all in the pursuit of additional property, luxury cars and the like,” said U.S. Attorney Bharara.  “His crimes have earned him 12 years in prison.  I would like to thank our law enforcement partners for their assistance on this case.”

According to the information, plea agreement, sentencing submissions and statements made during court proceedings:

Huff was a businessman who controlled numerous entities located throughout the United States (Huff-Controlled Entities).  Huff controlled the companies and their finances, using them to orchestrate a $53 million fraud on the IRS and other schemes that spanned four states, involving tax violations, bank bribery, fraud on bank regulators and the fraudulent purchase of an insurance company.  As part of his crimes, Huff concealed his control of the Huff-Controlled Entities by installing other individuals to oversee the companies’ day-to-day functions and to serve as the companies’ titular owners, directors, or officers.  Huff also maintained a corrupt relationship with Park Avenue Bank and Charles J. Antonucci Sr., the bank’s president and chief executive officer, and Matthew L. Morris, the bank’s senior vice president. 

Tax Crimes

From 2008 to 2010, HUFF controlled O2HR, a professional employer organization (PEO) located in Tampa, Florida.  Like other PEOs, O2HR was paid to manage the payroll, tax and workers’ compensation insurance obligations of its client companies.  However, instead of paying $53 million in taxes that O2HR’s clients owed the IRS and $5 million to Providence Property and Casualty Insurance Company (Providence P&C) – an insurance company based in Oklahoma – for workers’ compensation coverage expenses for O2HR clients, Huff stole the money that his client companies had paid O2HR for those purposes.  Among other things, Huff diverted millions of dollars from O2HR to fund his investments in unrelated business ventures and pay his family members’ personal expenses.  The expenses included mortgages on Huff’s homes, rent payments for his children’s apartments, staff and equipment for Huff’s farm, designer clothing, jewelry and luxury cars.

Conspiracy to Commit Bank Bribery, Defraud Bank Regulators and Fraudulently Purchase an Oklahoma Insurance Company

From 2007 through 2010, Huff engaged in a massive multi-faceted conspiracy in which he schemed to bribe executives of Park Avenue Bank, defraud bank regulators and the board and shareholders of a publicly-traded company, and fraudulently purchase an Oklahoma insurance company.  As described in more detail below, Huff paid bribes totaling hundreds of thousands of dollars in cash and other items to Morris and Antonucci in exchange for their favorable treatment at Park Avenue Bank. 

As part of the corrupt relationship between Huff and the bank executives, Huff, Morris, Antonucci and others conspired to defraud various entities and regulators during the relevant time period.  Specifically, Huff conspired with Morris and Antonucci to falsely bolster Park Avenue Bank’s capital by orchestrating a series of fraudulent transactions to make it appear that Park Avenue Bank had received an outside infusion of $6.5 million, and engaged in a series of further fraudulent actions to conceal from bank regulators the true source of the funds. 

Huff further conspired with Morris, Antonucci and others to defraud Oklahoma insurance regulators and others by making material misrepresentations and omissions regarding the source of $37.5 million used to purchase Providence Property and Casualty Insurance Company, an insurance company based in Oklahoma that provided workers’ compensation insurance for O2HR’s clients and to whom O2HR owed a significant debt.

Bribery of Park Avenue Bank Executives

From 2007 to 2009, Huff paid Morris and Antonucci at least $400,000 in exchange for which they: provided Huff with fraudulent letters of credit obligating Park Avenue Bank to pay $1.75 million to an investor in one of Huff’s businesses if Huff failed to pay the investor back himself; allowed the Huff-Controlled Entities to accrue $9 million in overdrafts; facilitated intra-bank transfers in furtherance of Huff’s fraud; and fraudulently caused Park Avenue Bank to issue at least $4.5 million in loans to the Huff-Controlled Entities.  

Fraud on Bank Regulators and a Publicly-Traded Company

From 2008 to 2009, Huff, Morris and Antonucci engaged in a scheme to prevent Park Avenue Bank from being designated as “undercapitalized” by regulators – a designation that would prohibit the bank from engaging in certain types of banking transactions and that would subject the bank to a range of potential enforcement actions by regulators.  Specifically, they engaged in a series of deceptive, “round-trip” financial transactions to make it appear that Antonucci had infused the bank with $6.5 million in new capital when, in actuality, the $6.5 million was part of the bank’s pre-existing capital.  Huff, Morris and Antonucci funneled the $6.5 million from the bank through accounts controlled by Huff to Antonucci.  This was done to make it appear as though Antonucci was helping to stabilize the bank’s capitalization problem, so that the bank could continue engaging in certain banking transactions that it would otherwise have been prohibited from doing, and to put the bank in a better posture to receive $11 million from the Troubled Asset Relief Program.  To conceal their unlawful financial maneuvering, Huff created, or directed the creation of, documents falsely suggesting that Antonucci had earned the $6.5 million through a bogus transaction involving another company Antonucci owned.  Huff, Morris and Antonucci further concealed their scheme by stealing $2.3 million from General Employment Enterprises Inc., a publicly-traded temporary staffing company, in order to pay Park Avenue Bank back for monies used in connection with the $6.5 million transaction.

Fraud on Insurance Regulators and the Investment Firm

From July 2008 to November 2009, Huff, Morris, Antonucci and Allen Reichman, an executive at an investment bank and financial services company headquartered in New York City (the Investment Firm), conspired to defraud Oklahoma insurance regulators into allowing Antonucci to purchase the assets of Providence P&C and defraud the Investment Firm into providing a $30 million loan to finance the purchase.  Specifically, Huff and Antonucci devised a scheme in which Antonucci would purchase Providence P&C’s assets by obtaining a $30 million loan from the Investment Firm, which used Providence P&C’s own assets as collateral for the loan.  However, because Oklahoma insurance regulators had to approve any sale of Providence P&C, and because Oklahoma law forbade the use of Providence P&C’s assets as collateral for such a loan, Huff, Morris, Antonucci and Reichman made and conspired to make a number of material misstatements and material omissions to the Investment Firm and Oklahoma insurance regulators concerning the true nature of the financing for Antonucci’s purchase of Providence P&C.  Among other things, Reichman directed Antonucci to sign a letter that provided false information regarding the collateral that would be used for the loan, and Huff, Morris and Antonucci conspired to falsely represent to Oklahoma insurance regulators that Park Avenue Bank – not the Investment Firm – was funding the purchase of Providence P&C. 

After deceiving Oklahoma regulators into approving the sale of Providence P&C, Huff took $4 million of the company’s assets, which he used to continue the scheme to defraud O2HR’s clients.  Ultimately, in November 2009, the insurance company became insolvent and was placed in receivership after Huff, Morris and Antonucci had pilfered its remaining assets.

*                *                *

In addition to his prison sentence, Huff was sentenced to three years of supervised release, and ordered to forfeit $10.8 million to the United States and pay a total of more than $108 million in restitution to victims of his crimes, including, among others, the Federal Deposit Insurance Corporation (FDIC) and the IRS.

In imposing today’s sentence, Judge Buchwald said Huff’s crimes were “truly staggering” and “eye popping.”  Judge Buchwald described Huff’s conduct, which was preceded by a federal conviction and failure to pay millions in civil judgments, as “a living example” of “chutzpah,” which she defined as “shameless audacity and unmitigated gall.”

Morris and Reichman pleaded guilty for their roles in the above-described offenses on Oct. 17, 2013, and Feb. 20, 2015, respectively.  Reichman is scheduled to be sentenced before Judge Buchwald on July 15, and Morris is scheduled to be sentenced before Judge Buchwald on Aug. 19.

Antonucci pleaded guilty to his role in the crimes described above on Oct. 8, 2010, and is scheduled to be sentenced on Aug. 20, also before Judge Buchwald. 

Acting Assistant Attorney General Ciraolo and U.S. Attorney Bharara thanked the Special Inspector General for the Troubled Asset Relief Program, the FBI, IRS-Criminal Investigation, the New York State Department of Financial Services, Immigration and Customs Enforcement’s Homeland Security Investigations, and the Office of Inspector General of the FDIC, for their work in the investigation, and the Tax Division and the U.S. Attorney’s Office of the Southern District of Florida, for their assistance in the prosecution.

Today’s announcement is part of efforts underway by the President’s Financial Fraud Enforcement Task Force.  The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations.  Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants.  For more information on the task force, please visit www.StopFraud.gov.

The case is being handled by the U.S. Attorney’s Office of the Southern District of New York Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Janis Echenberg and Daniel Tehrani and Special Assistant U.S. Attorney Tino Lisella of the Tax Division are in charge of the criminal case.  

Additional information about the Tax Division and its enforcement efforts may be found on the division’s website. 

A former special agent of the FBI was indicted yesterday for allegedly stealing over $100,000 of drug proceeds seized during the execution of search warrants and obstructing justice by taking steps to hide his alleged theft.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Special Agent in Charge Angel D. Gunn of the Justice Department’s Office of the Inspector General’s Los Angeles Field Office made the announcement.

“As alleged, former Agent Bowman put his own greed above the trust placed in him by the FBI and the American public,” said Assistant Attorney General Caldwell.  “Corrupt law enforcement agents not only compromise those investigations in which they are involved, but also damage the reputations of fellow law enforcement officers who are dedicated to public service and the protection of all Americans.”

Scott M. Bowman, 44, of Moreno Valley, California, was charged in the Central District of California with three counts of conversion of property by a federal employee, three counts of obstruction of justice, two counts of money laundering, one count of falsification of records and one count of witness tampering.

According to allegations in the indictment, which was unsealed today, Bowman misappropriated over $100,000 of drug proceeds seized in June and August 2014 during the execution of three search warrants.  The defendant allegedly misappropriated these funds after they were transferred to his custody in his official capacity as a federal law enforcement officer.

The indictment alleges that Bowman used the stolen money for his own purposes, including spending $43,850 in cash to purchase a 2012 Dodge Challenger coupe, $27,500 in cash to purchase a 2013 Toyota Scion FR-S coupe and approximately $26,612 in cash to outfit these vehicles with new equipment including speakers, rims and tires.  According to the allegations in the indictment, the defendant also used approximately $15,000 of the misappropriated cash to pay for cosmetic surgery for his spouse, and opened a checking account into which he deposited approximately $10,665 of the stolen funds, a portion of which he used to pay for a weekend stay at a luxury hotel, casino and resort in Las Vegas, Nevada.

According to the indictment, to conceal his misappropriation of the drug proceeds, Bowman allegedly falsified official FBI reports and other records.  Specifically, in connection with one of the seizures, Bowman allegedly endorsed an evidence receipt knowing that it did not accurately reflect the amount of cash seized and altered the same receipt by forging the signature of a police detective next to his own.

The indictment further alleges that Bowman made false representations to his colleagues regarding the disposition of certain seized drug proceeds.  In addition, Bowman allegedly sent an email to the detective whose signature Bowman had forged setting forth a detailed cover story that the detective should offer if asked about Bowman’s activities with respect to the seized drug proceeds.  According to the indictment, Bowman also allegedly provided the detective with a copy of the forged receipt so that the detective falsely could claim the forged signature as his own, if asked.

The charges contained in an indictment are merely accusations, and a defendant is presumed innocent unless and until proven guilty.

This case was investigated by the Department of Justice Office of the Inspector General and is being prosecuted by Trial Attorneys Robert J. Heberle and Lauren Bell of the Criminal Division’s Public Integrity Section. 

Bowman Indictment

The Department of Justice announced today that two banks, Rothschild Bank AG and Banca Credinvest SA, have reached resolutions under the department’s Swiss Bank Program.

“The days of safely hiding behind shell corporations and numbered bank accounts are over,” said Acting Assistant Attorney General Caroline D. Ciraolo of the Department of Justice’s Tax Division.  “As each additional bank signs up under the Swiss Bank Program, more and more information is flowing to the IRS agents and Justice Department prosecutors going after illegally concealed offshore accounts and the financial professionals who help U.S. taxpayers hide assets abroad.”

The Swiss Bank Program, which was announced on Aug. 29, 2013, provides a path for Swiss banks to resolve potential criminal liabilities in the United States.  Swiss banks eligible to enter the program were required to advise the department by Dec. 31, 2013, that they had reason to believe that they had committed tax-related criminal offenses in connection with undeclared U.S.-related accounts.  Banks already under criminal investigation related to their Swiss-banking activities and all individuals were expressly excluded from the program.

Under the program, banks are required to:

• Make a complete disclosure of their cross-border activities;

• Provide detailed information on an account-by-account basis for accounts in which U.S. taxpayers have a direct or indirect interest;

• Cooperate in treaty requests for account information;

• Provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed;

• Agree to close accounts of accountholders who fail to come into compliance with U.S. reporting obligations; and

• Pay appropriate penalties.

Swiss banks meeting all of the above requirements are eligible for a non-prosecution agreement.

According to the terms of the non-prosecution agreements signed today, each bank agrees to cooperate in any related criminal or civil proceedings, demonstrate its implementation of controls to stop misconduct involving undeclared U.S. accounts and pay penalties in return for the department’s agreement not to prosecute these banks for tax-related criminal offenses.

Rothschild Bank AG (Rothschild) was founded in 1968 and is headquartered in Zurich, Switzerland.  Rothschild offered services that it knew could and did assist U.S. taxpayers in concealing assets and income from the Internal Revenue Service (IRS), including code-named accounts, numbered accounts and hold mail service, where Rothschild would hold all mail correspondence for a particular client at the bank.  These services allowed certain U.S. taxpayers to minimize the paper trail associated with the undeclared assets and income they held at Rothschild in Switzerland.  For a number of years, including after Swiss bank UBS AG announced in 2008 that it was under criminal investigation, and following instructions from certain U.S. taxpayers, Rothschild serviced certain U.S. customers without disclosing their identities to the IRS.  Some of Rothschild’s U.S. clients had accounts that were nominally structured in the names of non-U.S. entities.  In some such cases, Rothschild knew that a U.S. client was the true beneficial owner of the account but nonetheless obtained a form or document that falsely declared that the beneficial owner was not a U.S. taxpayer.  Since Aug. 1, 2008, Rothschild had 66 U.S.-related accounts held by entities created in Panama, Liechtenstein, the British Virgin Islands, the Cayman Islands or other foreign countries with U.S. beneficial owners.  At least 21 of these accounts had false IRS Forms W-8BEN in the file, which are used to identify the beneficial owner of an account.  Rothschild knew it was highly probable that such U.S. clients were engaging in this scheme to avoid U.S. taxes but permitted these accounts to trade in U.S. securities without reporting account earnings or transmitting any withholding taxes to the IRS, as Rothschild was required to do.  Rothschild also opened accounts for U.S. taxpayers who had left other Swiss banks that the Department of Justice was investigating, including UBS.  Since Aug. 1, 2008, Rothschild had 332 U.S.-related accounts with an aggregate maximum balance of approximately $1.5 billion.  Of these 332 accounts, 191 accounts had U.S. beneficial owners and an aggregate maximum balance of approximately $836 million.  Rothschild will pay a penalty of $11.51 million.

Located in Lugano, Switzerland, Banca Credinvest SA (Credinvest) started operations as a fully licensed bank in 2005.  Credinvest offered a variety of services that it knew could assist, and that did assist, U.S. clients in concealing assets and income from the IRS, including hold mail service and numbered accounts.  Credinvest did not set up any formalized internal reporting regarding U.S. clients and did not adopt any procedures to ascertain or monitor the compliance of its U.S. clients with their U.S. tax obligations.  In late 2008, an external asset manager referred 11 accounts to Credinvest, all of which were for U.S. clients who had left UBS.  The bank delegated to that external asset manager the primary management of those accounts and failed to ascertain the compliance of those clients with their U.S. tax obligations.  The bank thus aided and assisted those clients in concealing their accounts from U.S. authorities.  Since Aug. 1, 2008, Credinvest had 31 U.S.-related accounts with just over $24 million in assets.  Credinvest will pay a penalty of $3.022 million.

In accordance with the terms of the Swiss Bank Program, each bank mitigated its penalty by encouraging U.S. accountholders to come into compliance with their U.S. tax and disclosure obligations.  While U.S. accountholders at these banks who have not yet declared their accounts to the IRS may still be eligible to participate in the IRS Offshore Voluntary Disclosure Program, the price of such disclosure has increased.

Most U.S. taxpayers who enter the IRS Offshore Voluntary Disclosure Program to resolve undeclared offshore accounts will pay a penalty equal to 27.5 percent of the high value of the accounts.  On Aug. 4, 2014, the IRS increased the penalty to 50 percent if, at the time the taxpayer initiated their disclosure, either a foreign financial institution at which the taxpayer had an account or a facilitator who helped the taxpayer establish or maintain an offshore arrangement had been publicly identified as being under investigation, the recipient of a John Doe summons or cooperating with a government investigation, including the execution of a deferred prosecution agreement or non-prosecution agreement.  With today’s announcement of these non-prosecution agreements, noncompliant U.S. accountholders at these banks must now pay that 50 percent penalty to the IRS if they wish to enter the IRS Offshore Voluntary Disclosure Program.

“These resolutions with Credinvest and Rothschild are further examples of the commitment by the IRS and the Department of Justice to ensure that U.S. taxpayers report foreign bank accounts and pay taxes on all income earned from those accounts,” said Deputy Commissioner Douglas O'Donnell of the IRS Large Business and International Division.  “We are encouraged by today’s progress and our ongoing work with the other Swiss banks that have entered the DOJ Swiss Bank Program.”

“The bank agreements announced today continue to change the landscape in the offshore banking world,” said Chief Richard Weber of IRS-Criminal Investigation. “With each additional agreement, the world where criminals can hide their money is becoming smaller and smaller.  Those who circumvent offshore disclosure laws have little room to hide.” 

Acting Assistant Attorney General Ciraolo thanked the IRS and in particular, IRS-Criminal Investigation and the IRS Large Business and International Division for their substantial assistance, as well as John E. Sullivan, Mark W. Kotila, Sean P. Beaty and Gregory S. Seador, who served as counsel on these matters, and Senior Counsel for International Tax Matters and Coordinator of the Swiss Bank Program Thomas J. Sawyer of the Tax Division.

Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.

Credinvest executed NPA and SOF.pdf (506.47 KB)

Rothschild excecuted NPA and SOF.pdf (444.58 KB)

This afternoon a federal conspiracy charge was filed against David Wright, aka Dawud Sharif Wright, aka Dawud Sharif Abdul Khaliq, 24, of Everett, Massachusetts, who has been associated with a plot to kill an unnamed target in another state.  Wright was arrested last night by federal authorities and had an initial appearance today in U.S. District Court in Boston.  His detention hearing is scheduled for June 19, 2015 at 2:00 p.m.

Wright is charged in a one count complaint which alleges that he conspired with now-deceased Ussamah Abdullah Rahim, 26, to obstruct a federal investigation by destroying electronic evidence on Rahim’s smartphone.  Rahim was shot and killed yesterday morning after he attacked Boston Police Officers and FBI agents seeking to question him.    

As alleged in the complaint affidavit, Rahim, a private security officer, was planning to engage in a violent attack in the United States, and had purchased three military-style fighting knives and a sharpener in furtherance of this plan.  In intercepted calls between Wright and Rahim, the men discussed a knife attack on an unnamed individual, and suggested that the target was to be beheaded and have his/her head placed on his/her chest.  According to the complaint, such beheadings are a tactic of some foreign terrorist organizations which use such killings in propaganda videos.

The affidavit also alleges that Wright and Rahim met with a third person on a beach in Rhode Island on May 31, 2015, to discuss the planned beheading.

At approximately 5:00 a.m. on June 2, 2015, law enforcement intercepted a call between Wright and Rahim, in which Rahim insisted that he could no longer wait to take action.  Instead of carrying on with his plan to behead the planned out-of-state target, Rahim declared that he was going to, “go after” the “boys in blue,” here in Massachusetts, because, “it’s the easiest target.”  Rather than discourage Rahim, Wright supported the plan, telling Rahim to prepare his will and to leave his possessions to a named individual.  After discussing Rahim’s plan to attack police officers in Massachusetts, Wright advised Rahim to destroy his phone and all of the evidence it contained to prevent “CSI” at “the scene” from obtaining incriminating information.

According to the complaint affidavit, on June 2, 2015, law enforcement officers met with Wright after Rahim attacked officers in Boston and was shot.  Wright told officers of a recent rendezvous with Rahim on a beach in Rhode Island, and of Rahim’s intention to behead a specified individual in another state.  Wright indicated he agreed with Rahim’s plan and supported it.

The charging statute provides a sentence of no greater than five years in prison, three years of supervised release and a fine of $250,000.  Actual sentences for federal crimes are typically less than the maximum penalties.  Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

This investigation is being conducted by the FBI’s Boston Field Division, Boston Police Department, Massachusetts State Police, and member agencies of the Boston Joint Terrorism Task Force, including the Bureau of Alcohol, Tobacco, Firearms and Explosives, Homeland Security Investigations, U.S. Marshals Service and others.  In addition, the Everett Police Department played a critical role in the response.

This case is being prosecuted by the U.S. Attorney’s Office of the District of Massachusetts in coordination with the Justice Department’s National Security Division.

David Wright Complaint

The Justice Department has announced that the United States District Court of the Western District of Louisiana yesterday approved a court-ordered agreement with the Lincoln Parish School Board to desegregate classrooms at four elementary schools serving students in grades K-5 in Ruston, Louisiana.  The department and the board jointly filed the consent order, after an investigation by the United States found significant racial isolation in the elementary school classrooms (called homerooms) within the Ruston attendance zone.

Under the consent order, the board will implement the following changes at the four elementary schools in Ruston: 

• assign students to homerooms so that the percentage of black and white students in each homeroom reflects the percentage of black and white students in each grade level at each school;
• refrain from grouping students into homerooms based on students’ perceived abilities and ensure that students of all academic levels are assigned to each homeroom;
• ensure that no homeroom class has more than forty percent special education inclusion students; and
• if the board chooses to continue operating the Advanced Learning Academy (“ALA”) program, it will transform the ALA program into a school-wide, racially diverse enrichment program designed to develop the gifts and talents of all students.

The consent order is part of a longstanding desegregation case monitored and enforced by the United States.  In reviewing the board’s compliance with previous orders on student assignment, the department concluded that the board was engaged in a variety of practices that contributed to the racial isolation in the elementary school homerooms.  These practices include the board’s use of ability grouping and the manner in which the board implemented its special education inclusion and ALA programs.

“We commend the Lincoln Parish School Board’s commitment to resolve this case by addressing the racial isolation in its elementary school homerooms in Ruston,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division.  “This consent order reinforces the Civil Rights Division’s steadfast commitment to ensuring that all students have access to equal educational opportunities, regardless of race or color.”

“This order is a significant step for the Lincoln Parish School Board toward achieving the goals of desegregation and equal access to education for all students,” said U.S. Attorney Stephanie A. Finley of the Western District of Louisiana.  “We look forward to continuing to work with the Board to ensure that these changes are successfully implemented.”

Upon full implementation of the consent order, the board may seek court approval to dismiss the desegregation case in the area of student assignment in December 2016. 

Promoting school desegregation and enforcing Title IV of the Civil Rights Act of 1964 is a top priority of the Justice Department’s Civil Rights Division.  Additional information about the Civil Rights Division of the Justice Department is available on its website at www.justice.gov/crt.

LYON, France – At the request of US authorities, INTERPOL Red Notices – or international wanted persons alerts – have been issued for two former FIFA officials and four corporate executives for charges including racketeering, conspiracy and corruption.

The Red Notices have been issued for;

Jack Warner, Trinidad & Tobago national, former FIFA vice president and executive committee member, CONCACAF president, CFU president and Trinidad and Tobago Football Federation (TTFF) special adviser.

Nicolás Leoz, Paraguayan national, former FIFA executive committee member and CONMEBOL president.

Alejandro Burzaco, Argentine national, controlling principal of Torneos y Competencias S.A., a sports marketing business based in Argentina, and its affiliates.

Hugo Jinkis and Mariano Jinkis, Argentine nationals, controlling principals of Full Play Group S.A., a sports marketing business based in Argentina, and its affiliates.

José Margulies (also known as José Lazaro), Brazilian national, controlling principal of Valente Corp. and Somerton Ltd., broadcasting businesses.

Red Notices are one of the ways in which INTERPOL informs its member countries that an arrest warrant has been issued for an individual by a judicial authority and seeks the location and arrest of wanted persons with a view to extradition or similar lawful action.

The individuals concerned are wanted by national jurisdictions and INTERPOL’s role is to assist national police forces in identifying or locating those individuals with a view to their arrest and extradition.

A Red Notice is not an international arrest warrant, and INTERPOL cannot compel any member country to arrest the subject of a Red Notice.

INTERPOL’s General Secretariat does not send officers to arrest individuals who are the subject of a Red Notice. Only the law enforcement authorities of the INTERPOL member country where the individual is located have the legal authority to make an arrest.

Co-op City Agrees to Enhance Accessibility, Pay Civil Penalties and Establish an Aggrieved Persons Fund

The Department of Justice and the Department of Housing and Urban Development (HUD) announced today that the United States has simultaneously filed and settled a civil rights lawsuit against RiverBay Corporation, which manages “Co-op City,” the largest affordable housing cooperative in the United States, alleging that RiverBay failed to provide reasonable accommodations to people who require service or assistance animals.  Specifically, the lawsuit alleges that RiverBay maintains and employs an overly burdensome and intrusive policy governing waivers to its no-pets rule, which has deterred and prevented persons with disabilities from obtaining reasonable accommodations, in violation of the federal Fair Housing Act.  The consent decree was approved on June 2, 2015, by U.S. District Court Judge Valerie E. Caproni.

“Assistance animals provide vital support and therapeutic benefits for persons with disabilities,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division.  “This significant settlement underscores the department’s commitment to ensuring that housing providers make reasonable accommodations for individuals who rely on assistance animals to use and enjoy their homes.”

“Housing providers must allow for reasonable accommodations to qualified individuals with disabilities, including granting requests to keep assistance or service animals,” said U.S. Attorney Preet Bharara of the Southern District of New York.  “Today’s settlement benefits all those who require or may someday require a service or assistance animal, as it ensures that RiverBay will implement a reasonable accommodation policy consistent with the Fair Housing Act and that people who were unlawfully denied full use of their residences will be compensated appropriately.  We thank RiverBay for its cooperation in improving housing accessibility for all of its residents and in providing for a more caring and compassionate environment for Bronx residents.”

“Housing providers have a legal obligation to grant people with disabilities the reasonable accommodations they need,” said Assistant Secretary Gustavo Velasquez of HUD.  “Thanks to this settlement, RiverBay residents who need assistance animals or other accommodations will now be able to fully enjoy their homes.”

According to the complaint filed in federal court:

RiverBay, located in the Bronx, New York, is the owner and operator of the largest affordable housing cooperative in the United States, with approximately 15,372 residential units and 60,000 residents.  RiverBay has used an unlawful policy governing waivers to its no-pets rule to deny accommodation requests of persons with disabilities, and has engaged in a pattern or practice of discrimination toward persons with disabilities who request accommodations to its no-pets rule.  Specifically, until December 2011, when RiverBay amended its policy and application governing reasonable accommodations, RiverBay’s application for requesting a reasonable accommodation to its no-pets rule consisted of five forms (including one required to be completed only in blue ink and another required to be typewritten), prohibited certain breeds of dogs, required animals to be neutered or spayed, imposed annual renewal requirements and required the applicant to provide his or her medical records.  In December 2011 and again in July 2014, RiverBay amended its reasonable accommodation policy, but left in place many of the provisions in the first policy, including a prohibition against certain breeds of animals, a prohibition which RiverBay could waive based only on an applicant’s “medical need” for that particular breed. 

Moreover, between 1995 and 2014, the Secretary of HUD, the New York State Division of Housing and Community Renewal and the New York City Commission on Human Rights received and investigated multiple complaints about RiverBay’s practices concerning reasonable accommodation requests.  HUD issued three separate charges of discrimination against RiverBay and participated in two administrative hearings before an administrative law judge (ALJ) concerning RiverBay’s reasonable accommodation policy.  In each proceeding, the ALJ determined that RiverBay had violated the FHA.  In addition, between January 2005 and November 2011, RiverBay denied 28 out of 42 requests for reasonable accommodations to its no-pets rule; another two individuals did not complete the application process.   

Under the consent decree approved today, RiverBay will adopt the reasonable accommodation policy regarding assistance animals that is included in the consent decree.

In addition, RiverBay has agreed to pay a civil penalty of up to $50,000, and to dedicate as much as $600,000 to compensate people who have been harmed by inadequate accessibility at Co-op City.

Under the settlement, a person may be entitled to receive monetary compensation if he or she was a resident of RiverBay, or associated with a resident of RiverBay, and was:

• prevented or discouraged from requesting to keep an assistance animal;

• denied a request to keep an assistance animal; or

• harassed or otherwise interfered with after requesting to keep an assistance animal.

Individuals who wish to make a claim for discrimination concerning Co-op City on the basis of disability, or with any information about persons who may have such a claim, can contact the U.S. Attorney’s Office of the Southern District of New York by phone at (212) 637-2800, by fax at (212) 637-2702, online at www.justice.gov/usao/nys/civilrights or write to:

United States Attorney’s Office, Southern District of New York

Attn: Civil Rights Unit

86 Chambers Street

New York, New York 10007

Individuals with a disability who believe that they are being discriminated against by their housing provider may contact the Fair Housing and Equal Opportunity Office, Department of Housing & Urban Development, 26 Federal Plaza, Room 3532, New York, New York, 10278-0068 and at (800) 496-4294.

This case is being handled by the U.S. Attorney’s Office of the Southern District of New York’s Civil Rights Unit.  Assistant U.S. Attorney Ellen Blain of the Southern District of New York is in charge of the case.

The Justice Department announced today that it has opened an investigation of the Jefferson County Jail in Birmingham, Alabama, focusing on the treatment of juveniles.  The investigation will assess whether juveniles are detained at the jail in conditions that pose a serious risk of harm to their physical and psychological well-being. 

The department has received allegations that juveniles at the jail are regularly housed with adult detainees, have been victims of sexual abuse and have been approached by adult detainees for sexual activity and favors.  Additionally, juveniles, including those with diagnosed mental illnesses and intellectual disabilities, allegedly are routinely placed in solitary confinement or lockdown—sometimes for months at a time—with little or no access to the law library, telephone, commissary, educational opportunities and other services. 

“Isolation—particularly the prolonged and restrictive lockdown alleged in Jefferson County—can lead to paranoia, anxiety, depression and suicide, and exacerbate pre-existing psychological harms,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division.  “Indeed, the 2012 Report of the Attorney General’s National Task Force on Children Exposed to Violence concluded that ‘[n]owhere is the damaging impact of incarceration on vulnerable children more obvious than when it involves solitary confinement.’"  

“Our commitment to finding solutions to problems in Alabama’s troubled jails and prisons is ongoing,” said U.S. Attorney Joyce White Vance for the Northern District of Alabama.  “Where possible, the best solution is always a collaborative approach that encourages the state and counties to correct conditions that are constitutionally inadequate.  However, we have not hesitated to file suit where necessary.”

The department will conduct the investigation using its authority under the Civil Rights of Institutionalized Persons Act (CRIPA) and the Violent Crime Control and Law Enforcement Act.  Under CRIPA, the Attorney General has the authority to investigate violations of the constitutional rights of prisoners in “institutions,” including county jails, where such violations are “pursuant to a pattern or practice of resistance to the full enjoyment of such rights.”  The Violent Crime Control and Law Enforcement Act authorizes the Attorney General to bring suit against any governmental entity that has engaged in “a pattern or practice” of depriving juveniles of their rights secured by the Constitution or federal statute.  The department has conducted similar investigations in other jurisdictions, including of the Leflore County Juvenile Detention Center in Mississippi, the jails on Rikers Island in New York, the Terrebonne Parish Juvenile Detention Center in Louisiana and the Scioto and Marion Juvenile Correctional Facilities in Ohio. 

The Special Litigation Section of the Civil Rights Division is conducting this investigation.  Individuals with relevant information are encouraged to contact the department via email at community.jeffersoncounty@usdoj.gov or by phone at (855) 258-1432.